Automobile insurance fraud in California has historically taken several forms. The most common fraud schemes involve automobile property and automobile accidents. Automobile Property - This type of fraud most often involves dishonest auto body and repair shops and/or insureds who may employ a variety of illegal or questionable techniques including:
-
Reporting parts of vehicles as damaged or lost when in fact they were not damaged or lost prior to the shop receiving the vehicle
-
Charging an excessive final cost as compared to the original estimate of damage
-
Listing charges for repairs on the billing statement that were not authorized
-
Billing and charging for original manufacture parts when after-market or salvaged parts from junkyards were used
-
Billing and charging for original manufacture parts when pounding out dents or using bondo for repairs
-
Reporting vehicles as stolen or vandalized falsely in order to collect insurance monies
-
It is always very important for the consumer to carefully review all paperwork from auto body repair shops in order to protect against potential fraud. Also, consumers should be cautious of any auto body or repair facility that makes referrals to medical or legal offices. This practice may be an indicator of "capping." Capping (a felony in California) is the illegal referral of clients to legal offices for a fee.
Automobile Accidents- Automobile fraud often involves organized auto accident rings. Staged auto accidents, which are not accidents at all, follow several basic schemes including:
-
Stopping suddenly for no apparent reason
-
Disregarding the right-of-way intentionally
-
Giving up the right-of-way purposely in order to cause an accident
-
Reporting passengers who were not in the vehicle at the time of the accident
-
Listing witnesses who were not at the scene of the accident
-
Claiming excessive bodily injury as compared to vehicle damage
-
It is also common for staged auto accidents to involve drivers who have temporary vehicle registration, vehicles that have prior damage from other "accidents," and attorneys who contact accident victims without being solicited.
If you have been in an auto accident, be cautious of any unsolicited referral to a body shop, law office, or medical office. Organized accident rings and cappers actively solicit others in the community to participate in the creation of accidents. Often these accidents only exist on paper (referred to as paper accidents), and no innocent parties are involved. Paper accidents have gained popularity among fraud perpetrators, as they are less dangerous from a bodily injury standpoint, and there is less likelihood of police involvement.
