California Drivers Cautioned Against Staged Collisions

With summer vacation looming and many Californians traditionally driving more frequently or longer distances, California Insurance Commissioner Steve Poizner is warning area drivers to be alert for staged auto collisions. In 2007-2008, 14,623 referrals out of 23,734 insurance fraud referrals received by the California Department of Insurance – 61 percent – were for suspected automobile insurance fraud.

More than $182 million could have been lost by insurance companies in 2007-2008 if the auto insurance fraud was not discovered. Actual loses, however, are subsequently built into the insurance companies’ pricing structures.

In Sacramento there were 802 suspected fraudulent claims (SFCs) in 2007-2008. That’s down from 856 SFCs in 2006-2007, but up from 788 in 2005-2006. In Sacramento County, potential losses were $5.6 million in 2007-2008, up from $5 million in 2006-2007 and comparable to the $5.8 million in potential losses in 2005-2006.

CDI said there are primarily three schemes typically used in staged collisions:
– Panic stop;
-Start-and-stop; and
-Swoop-and-squat.

People who create these pre-planned accidents, also known as stagers, look for high value targets, such as commercial vehicles, expensive luxury vehicles, and vehicles owned by cities or counties., CDI said. These vehicles are considered “high value” because of the virtual guarantee of insurance coverage.

The following signs may tip-off a driver of fraudulent activity:
– The other car is packed with passengers;
-The other driver has a relatively new insurance policy;
-The other car is in poor condition or has a “salvage” title;
-Traffic was flowing smoothly and the other driver stopped suddenly;
-The other driver and/or the passengers make extra effort to avoid conversation about the other vehicles in the area;
-There is a witness that substantiates everything the other driver says; and
-The other driver and his passengers all claim injury despite relatively minor collision damage to the vehicles.

Victims of staged collisions are being referred to: www.insurance.ca.gov.

Source: CDI

Topics California Fraud Personal Auto