Staged Accidents Cost Big Money in Insurance Fraud is seeing a growing incidence of insurance fraud, specifically, in auto bodily injury (ABI) cases. Part of the increase in claims is due to contrived accidents, which are also called set up auto accidents or staged accidents. These accidents involve a large number of people – both “victims” and service providers (car repairs, doctors, chiropractors) – and cost insurance consumers billions of dollars in increased premiums.

The way it works is this:

  1. Several vehicles, say up to 10, are hired. The drivers of the vehicles and their passengers are paid a stated amount (could be $1,000 – $2,000) to participate.
  2. They drive in a pack on the highway, box in a car and cause an accident. Often that is stopping suddenly in front of the “victim” and causing a truck or other large vehicle to rear end the innocent driver. They then all hit each other.
  3. All of the hired participants claim injuries and the service providers collect on repairs not needed or performed and/or treatments and rehab that are not needed, nor performed, yet billed to the insurance carrier.

The sad part is that many of the “hired participants” are people new to the United States who don’t understand this is illegal or those who believe that it is not hurting anyone since it is the insurance company paying it. They see it as payback for all the premiums they have already paid. The participants may actually get hurt while the people orchestrating the contrived accidents are the ones collecting on the claims.

This is organized insurance fraud and catching the culprits often requires intensive vehicle accident investigation, as well as personal injury investigation. Not only are our investigators looking for the two prime indicators of fraud:

  1. Is the insurance claimant working elsewhere
  2. Physical activity above the level of restrictions claimed

They are also looking at the claimants visiting doctors, therapy and rehab centers. The length of visits, their actions going in and out and the condition of their vehicles are all clues. Because of the scope of the case, an investigation takes time and legwork. Not only does the investigator have to find and follow a subject, but in contrived accidents, there may be 20 – 30 subjects.

But with professional personal injury investigations that insurance carriers get with , more insurance fraud is being uncovered and the people behind it are being charged and convicted of the crimes.

-Brenda McGinley, CEO, All in Investigations, All in Investigations