Helping Win The Battle Against Limo Insurance Fraud – Part I

Limousine companies are viewed as easy targets for fraud because of their large insurance coverage limits.

With the busy holiday season in full gear, traffic is going to increase on the highways, in the cities and in the suburbs. With so many vehicles on the road, it is also a prime time for unscrupulous thieves to attempt to perpetrate on-the-road limo insurance fraud against you and your company. The National Insurance Crime Bureau (NCIB) has warned that the one industry that continues to show sustained growth, even in tough economic times, is limo insurance fraud. And the crooks are getting more and more creative about ways to separate you from your hard-earned dollars. According to the Association of Fraud Examiners, insurance fraud is costing the American public more than $96 billion in increased premiums per year, and over $400 billion in total costs of goods and services. The cost to transportation companies is a very large share of these totals because they are viewed as easy targets with large insurance coverage limits. Staged accidents have risen by 33% since 1992 and fraudulent claims by passengers in other vehicles, body shops, phony medical facilities and other claimants have shown a steady increase as well.

So what do you need to look out for when you’re on the road to avoid limo insurance fraud? Today’s staged accidents are actually very sophisticated and well planned events. They usually involve more than one vehicle and often have passengers on board, carelessly putting them in harm’s way. Four of the most common scams are:

Swoop and Squat. A scammer’s vehicle swoops in front of you and its driver slams on the brakes, causing a rear-end collision. Often, another vehicle is in on the scam and pulls up next to you, blocking your ability to move and avoid the stopped auto of his partner in crime in front of you. While the vehicles may only suffer minor damage, the crooks file a large claim for fake injuries and vehicular damage.

Drive Down. As you attempt to merge, another driver waves you forward. As you proceed, the suspect purposely accelerates and collides into your vehicle, then that driver denies ever motioning to you and often has a passenger who will swear you just cut them off.

Sideswipe. As you round a corner at a busy intersection with multiple turn lanes, the scammer’s vehicle deliberately sideswipes you if you inadvertently drift into the other lane while completing the turn. The clever cheats will take advantage of any slight mistake on your part to minimize danger to themselves and maximize the damage to their vehicles which are frequently already damaged.

Adding Damage. After a collision, staged or not, the scammers go to another location, cause more extensive damage to their vehicle and claim the damage happened as a result of the original accident. Fortunately, the proliferation of camera-phones and instruction-laden AccidentCam cameras provided by commercial auto insurers like Lancer’s LimoDirect has helped lessen the frequency of this often expensive claim.

In our next installment, we’ll discuss how you can fight back against the scammers and reduce your chances of becoming a victim of limo insurance fraud.