Commissioner Warns Californians Of Auto Insurance Fraud

Commissioner Steve Poizner of the California Department of Insurance alerted motorists earlier today of the dangers of deliberately-induced automobile collisions, perpetrated by those who seek to profit from auto insurance fraud.

More than 60% of all the cases of fraud reported to the California Department of Insurance have been related to automotive insurance. These fraudulent schemes would have resulted in over $182 million worth of total losses for California auto insurance providers, had they not been detected and reported.

In Sacramento County, the seat of California’s state government, the total money nearly lost auto insurance fraud amounted to $5.6 million between 2007 and 2008. Between 2006 and 2007, that figure was at $5 million. The year prior to that, it had been $5.8 million, with 788 reported and prevented cases of fraud.

The figures fluctuate. However, ultimately, honest policyholder are the ones who end up paying for the fraud. When auto insurance provider lose money from fraud, they raise their rates across the board, to compensate for the losses.

Poizner went on to detail the three main types of auto insurance fraud operations that motorists were likely to see: the panic stop, the start-and-stop, and the swoop-and-squat. Poizner explained that the people who deliberately create automobile accidents in order to profit from insurance tend to target pricy cars, commercially-operated vehicles (such as commercial trucks or buses), or cars and other motor vehicles owned by state and local government institutions. Schemers target these types of vehicle because they are almost certain to be possess far-reaching insurance coverage.

Poizner told motorists to look out for accidents in which one of the cars causes an accident by halting unexpectedly. Other warning signs include a car full of passengers involved in an accident, in which all the passengers and driver report being hurt without significant destruction inflicted upon their vehicle.

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