NJ car insurance and common fraud schemes

Dealing with NJ car insurance claims because of accidents is certainly the last thing drivers have on their minds when getting in their cars. The fact of an accident itself can be very annoying, even if there's no significant damage and no one got hurt. But it gets even worse when you find out that the crash was stage and you have become the victim of an insurance fraud.

Despite the fact that insurance fraud is considered as one of the gravest financial crimes in the USA along tax evasion, there are still too many cases of such activity taken place each year. It is estimated that about 20% of bodily injury and 10% of property damage claims are fraudulent in their essence, with additional value included or the causes of the damage/injury being completely different. Due to the fact that insurance claims are made post-factum after the accident, there's a space for increasing the actual damage and injuries. That's why criminal groups and individuals never cease to apply their schemes to make money on insurance claims.

Fraudulent claims are one of the factors that contribute to the increase of NJ car insurance rates for all drivers. It is estimated that about $200-300 of your premium is actually the cost added by insurance scams. And it's even more unpleasant when you become the victim for such cases. Insurance fraud usually takes the form of a staged crash that follows certain scenarios. And it's in your own interest to learn these schemes in order to avoid becoming their victim:

Rear-end crash-for-cash. This is the simplest and the most common scenario. The fraudster drives in front of you or switches the line in the last moment and hits the brakes when you can't avoid rear-ending him. In most states it's the rear driver who is considered at fault, so you will typically be responsible for paying the claim. The best way to avoid becoming a part of such a crash is to respect the distance between cars depending on your speed so that you will always have space for maneuver or stop.

The bad Samaritan. This is a more complex scheme as it involves some acting from the part of the fraudster. The crash may actually be real, but there will be a person (either an eye witness or the tow truck driver) who will suggest using the services of a specific repair shop or clinic for you damage or injuries, since they are more affordable. However, when you pay for the services and wait for the coverage, it turns out that there's no such legal entity and you've paid to a scam. That's why it's crucial to work only with your and the party's NJ car insurance provider without using the help of any third parties.

Fake injuries. Regardless of the accident type, the other party may report serious injuries and pain in order to get more injury coverage from your NJ car insurance policy. This may be supported by fraudulent medical reports that the other party may deliver later. The best way to avoid becoming part of this scheme is to file a police report in case of any accident, which will include all the injuries that were at the site of the accident. If the fraudster will later claim to have serious injuries and require medical treatment, this report will help your provider determine the bogus nature of such statements.

Phantom victims. It's very common for the scammers to file fake injury claims for victims that actually weren't inside of their car. This can be effectively prevented by taking pictures of the scene and writing down contact information of all the people involved in the accident. This way it will be harder to include any phantoms to the claim.

Of course, there will be different variations and additional scenarios that the scammers might put into action. But you should always remember that they are all based around the same principle of misinforming the police or the NJ car insurance company. And the best way to counteract is to gather all the information right at the scene, if the accident has actually taken place, and avoid any staged crashes by respecting all the traffic rules.

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