ALERT: 3 Rising Auto Insurance Scams

Each ties to repairs. Each has several varieties. Each costs us all in higher premiums.

• AUTO GLASS CLAIMS. The National Insurance Crime Bureau (NICB) recently disclosed this one after its investigation in Florida. It involves what the NICB described as an assignment of benefits form, or AOB. The way it works is your car is parked at a grocery store, car wash or some other public place. Your windshield has a crack or chip in it. Someone representing an unscrupulous windshield repair company approaches you as you come back to your vehicle. The person offers to repair your windshield for free or at a significant discount if you’ll just sign a form. “The paper is an AOB form, which means you are giving the auto glass company the right to file an insurance claim, make the repairs, and collect any insurance payments,” wrote the NICB in its blog. “The problem is these fraudulent companies are turning this into a lucrative business by inflating your insurance claim and collecting the money for themselves.” The scam may also inflate your premium, so you end up paying for it anyway.
• AUTO REPAIR SCAMS. The Coalition Against Insurance Fraud listed five auto repair scams which can either threaten your safety or raise your insurance premiums:

1. PADDING CHARGES. Get that estimate in writing before you sign for any repair. Verbal estimates have a way of blowing up.

2. NEEDLESS REPAIRS. When that oil leak can be repaired with a $15 seal, but the mechanic wants to charge you $1,800 for a new vacuum pump.

3. COUNTERFEIT OR USED PARTS. This is not to be confused with after-market parts. After-market parts for cosmetic repairs (bumpers, quarter-panels, etc.) are perfectly acceptable. Some insurance policies even require that after-market options be considered first before original equipment manufacturer parts, or OEM. I’m talking about actual used parts being sold and installed as new. Ask to see both the broken part and its new replacement — the mechanic should allow you to keep the old part if you want it. Take a picture of the serial number or other identification on the replacement part.

4. SHODDY WORK OR NONE AT ALL.

5. BAIT-AND-SWITCH MAINTENANCE SPECIALS. They hook you with a low oil change price, then suddenly hit you with more expensive (and unneeded) services.

• COUNTERFEIT CRASHES. In 2010, I investigated a fraudulent crash ring in Memphis. The ring-leader had his underlings park their cars at apartment complexes all over the city. The leader would then rent U-Haul trucks or trailers, then purposely smash them into his co-horts’ cars parked at the apartment complexes. The leader would then file false insurance claims against U-Haul’s insurance policy or the policies covering his co-horts’ vehicles. He’d collect the insurance checks, then pay his bad actors.

Insurance investigators clued me into the techniques scammers use to pull off counterfeit crashes. They even have creative names:

• THE STOOP-AND-SQUAT. The scammer passes the victim’s vehicle, merges in front, then slams on the brakes. Since the innocent motorist ran into the scam vehicle, the innocent motorist is considered at fault unless he/she can prove the fraud.
• THE BULL-AND-COW. Same as the ‘stoop-and-squat,’ but it adds a second vehicle behind the innocent driver. The scam driver in front slams on the brakes, the victim slams into that vehicle, then the scam artist behind the victim slams into the victim’s car. They work together to try to claim bogus medical compensation or insurance pay-offs.
• THE T-BONE. At a four-way stop, the scam artist motions for the victim to drive through the intersection. As the victim moves into the intersection, the scammer accelerates to “t-bone” the victim’s vehicle.

That’s why when you’re at an intersection stand-off, you should be extra polite and insist that it’s the other guy’s turn to go. When he waves at you, wave him off.

He just might be the ring-leader of the latest auto insurance scam in your neighborhood.

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