How To Avoid Car Insurance Scams

Car insurance scams increase premiums for all other, legitimate policyholders. By causing fake accidents and scheming insurance companies out of billions of dollars in fraudulent claims, all drivers and policyholders suffer. Nonetheless, drivers can learn how to avoid car insurance scams and not be a victim of fraud that will likely increase your rates.

Swoop & Squat

In a swoop and squat scam, the team of perpetrators will be packed into two cars. Suddenly one car will swoop into the victim’s lane, and force the victim to swerve into the next lane to avoid a collision. The “squat” car in front of the victim, who is also part of the scam, will then suddenly slam on the brakes, causing a rear-end collision, and the victim will be at-fault.

The criminals in the car that got rear-ended will typically claim they have multiple medical injuries, like neck injuries and whiplash – all injuries that are easily faked. The doctor diagnosing and treating the criminal may be involved in the scam as well. Unfortunately, this type of accident can result in huge claims due to physical damage and repairs as well as medical bills, and victims will see their premiums skyrocket.

The Wave

In congested traffic, the criminal car will wave the victim car in, effectively giving them the right-of-way. However, when the victim tries to merge into the lane or make a turn, the criminal will speed up and cause an accident. The perpetrator will claim he never waved the car in and testify to the police and insurance company that the victim didn’t look before crossing, and is therefore at-fault. This scam is harder to prevent because anyone can do this, so be careful when switching lanes and find a witness to testify that you were waved-in.


This requires a team effort, and is typically done in a low population density area. The criminal scammers will wait at an intersection for a victim to pull up. When the victim stops at the stop sign or begins to pull forward at a light, the criminal will collide into the victim’s car at the intersection. Several witnesses, who are also in on the scam, will be there to testify to police that the victim ran a red light or missed a stop sign.

Paper or Fake Accident

Similar to health insurance or Medicare fraud, criminals who own or have connections to a mechanic or auto body shop will file false claims with insurance companies for accidents that never actually happened. Keeping the claim under $1,000, the car insurance company will rarely investigate. Sadly, this type of scam is actually very common and difficult to identify unless the scammers become too greedy and attract attention to themselves by filing too many claims in a short period of time.

Fake Helpers or Witnesses

Almost like ambulance chasers, these fake witnesses show up on accident scenes with helpful information. They can sometimes offer to testify on their behalf, but mostly, this is a con to make you feel obligated to use the auto repair shop they are recommending. They will offer assistance, phone numbers for good attorneys and repair shops, but you definitely do not want it. Con artists will be working with body shops that inflate prices and overcharge insurance companies, thus increasing the cost of your repairs and car insurance coverage in the long run.

How To Avoid Being A Victim In A Car Insurance Scams

Protect and save yourself money on car insurance with the following:

  • Be a careful, wary driver. Leave enough space between you and the car in front of you, drive the speed limit to avoid losing control, and always be aware of your surroundings. Typically, a good driver does not cause a car accident, but is a victim of a bad driver. Regardless, you still have to deal with the headache of filing a claim, getting your car repaired, and everything in between.
  • At the scene of a car accident, make sure to take pictures of everything you may need to recall as evidence later. Being prepared will help deter criminals when attempting to commit fraud because it increases their chances of getting caught. Check out my article on what to do after an accident.
  • Research and compare auto shops and doctors before trusting them, and try to get multiple repair estimates. Usually, family or friend referrals are best when considering a new body shop or physician.
  • Compare car insurance quotes online when your contract is up for renewal after an auto accident. This will likely be the time your insurance company tries to increase your premiums. You never know if you are overpaying for your coverage until you find cheaper rates from another company. Get free quotes online and compare rates, policies, and insurance companies to get the best coverage.

If you suspect you are the victim of a scam, get in touch with the National Insurance Crime Bureau (NICB). They can be reached at 1-800-835-6422 or at their website: