You’ve just been in a collision. Your car’s banged up and so are you, but you grab the insurance information, report the incident to the police and call your insurance company to start processing a claim.
A few days later, you’re sued for injuries to the other driver and their passenger. The problem? You’re sure there was no passenger in the car.
These “ghost riders” are just one form of insurance fraud that AMA Insurance’s special investigations unit (SIU) deals with every day. The SIU is charged with protecting our members and customers — and their insurance rates — from fraud.
Why is fraud such a big deal? Insurance works on a system where many people pay premiums with only some of those people making claims at any given time. This enables insurance companies to pay for claims that often cost more than the premiums paid by any individual. Because the cost of claims is spread across all the premiums being paid, everyone pays for fraudulent claims.
That’s why AMA has a team of five investigators — former police officers — working on our SIU to crack down on fraud.
In addition to the ghost rider scenario above, the SIU sees a number of different types of fraud. Some of the more common include:
- The “Swoop and Squat” – Two cars pull alongside you. The first darts in front of you and slams on the brakes. The second drives right next to you, not allowing you to swerve to avoid rear-ending the car that just cut you off.
- Stolen and burned – A vehicle is reported stolen and found a few days later burned and abandoned.
- Arson – A house is burned down for the insurance payout. It’s not common, but it does happen.
- Inflating a claim – Claiming that the amount of damage or loss was higher than it actually was. This could also include instances where expensive items are claimed as lost or stolen when they aren’t or when they didn’t exist in the first place.
- Fraudulent applications – People who are untruthful in their application for insurance so they can take advantage once a policy is issued.
So how can you stop these sorts of scams from happening? A lot of it has to do with paying attention to your surroundings and reporting suspicious activity. Here are a few tips from AMA’s SIU on what you can do to reduce insurance fraud:
- Keep your eyes peeled – The first key to catching fraud is noticing something that doesn’t quite add up, the SIU says. Make note of the details in a collision or around your neighborhood that don’t make sense or seem suspicious.
- Tell somebody – If you suspect you have been victimized by insurance fraud or something about your claim doesn’t add up, tell you insurance company about it. They can’t act on information they don’t have.
- Take pictures – Cameras have never been more prevalent in society than they are today; most of us have one in our purses or pockets at all times. Provided it’s safe to do so, take pictures of a collision scene, noting the location and damage of the vehicles, the makes and models, the licence plate numbers and the other person’s insurance information.
- Ask for witnesses – Ask other motorists to provide contact details for the police and insurance companies in the case of a collision. Ask your neighbours what they have seen if something happens to your house.
- Use a dashcam – They aren’t particularly common, but a dashboard video camera in your vehicle can prove that car rolled back into you at that stoplight or that you were completely stopped when you were hit.