Car insurance fraud is big business in the United States. According to the FBI’s official site, “the total cost of insurance fraud in the United States is more than $40 billion a year.” In other words, insurance fraud costs the average U.S. household an estimate of $400 to $700 a year that comes in the form of increased premiums.
We asked the USAA insurance company to show us some of these car insurance schemes, these staged and phony accidents. We have the first one right here. This is called the “drive down scheme” and this is how it works: If you watch the video below you’ll see a guy who’s waiting at the traffic stop and then the other car, the victim. The man at the traffic stop says “come on through, come on through” and then he hits him!
And what happens after the accident is that the car insurance fraudster says “oh, I didn’t tell you to come through, why did you come through?” And then, you as the auto insurance victim says “listen, you were waving me!” “No, I wasn’t waving you, I had a fly in my nose, I didn’t do that.”
It’s quite usual for a car driver to do a traffic stop and then another car stops, waves at him, and tells him to pass. In most of these cases, the driver is honest but there are some drivers out there who are willing to lie and scam you and your insurance company for some money.
The other common type of auto insurance scheme is the “panic stop”. This is, perhaps, the most common of all. Just watch the video below:
The insurance scammer is in the white car and the victim drives the second car, the blue one. The white car does something really bad, he stops suddenly and what usually happens is that the auto insurance scammer’s car is full of people, including a lookout who waits to see when the blue car is distracted, and then says to the driver “slam on your brakes!”
The car shortstops just like that. Then, the driver steps out of the vehicle and says “Hey, I’ve got a whiplash and you’re gonna owe me a lot of money!”
In some cases, the people in the car involved in the car insurance fraud try to look injured, they call an ambulance or just say “Well, it’s okay” but then they make a claim to the insurance company or, even worse, sue the victim a few months later after they go to phony doctors and lawyers and build up these insurance schemes.
In the last example, we are showing you here, three different vehicles are involved in a car insurance fraud operation. It’s called the “swoop-and-squat” scheme.
In the video, we see three vehicles: a red sedan, a grey truck, and a white van. The latter one is the victim, the former two are the car insurance scammers. The grey truck pulls in front of the red car, forcing the red car to stop. The victim then strikes the red car, then what happens is the grey truck takes off! Just like that…
So the red car either says “It wasn’t my fault, the truck cut me off” (the victim would never think that the truck and the red car are ‘working’ together in the car insurance scam) and then the victim says “what were you talking about?!? There was no truck that cut us off you hit me in the rear”
Obviously, under the law a strike in the rear is pretty much absolute liability for the person who strikes the car in front of you, so one of these scammers could eventually cost you a lot of money.
Insurance companies like USAA, Allstate, or the FBI bring us 5 quick tips to avoid being a victim of one of these car insurance scams:
- “Pay attention and don’t tailgate” – Very important. Don’t tailgate because you’re going to be set up as a victim in these underworld car insurance schemes.
- Call 911 if you have an accident and get a report.
- Tell the car insurance company and don’t settle for cash on the scene.
- Carry a camera and document at the scene.
- Beware of the alleged witnesses at the scene.
If you have an accident and you say “well, there’s no real damage, it’s fine” you have to call the police anyway because what will happen is someone will say “oh no I’ve got slipped discs now I can’t walk, I’m disabled.”
Car insurance companies also recommend drivers carry a dashcam, so you can document the scene. Do notify your insurance company about the accident and don’t settle for cash at the scene.
This last mistake is surprisingly common: Some people may say “well, you know what, I pay you $100 – $200, I don’t want to pay the deductible so let’s settle this now” but then these scammers sue you anyway, the insurance company says “listen, you didn’t tell us about this accident I can’t cover you on this” and you’re in big trouble if that ever happens.
Also, be aware of witnesses. There are many times where witnesses are part of the car insurance scam and, after the accident, they approached you and say “look, I have a very good lawyer,” or “I know a doctor you can see” and other phony tactics to try to dissuade you not to inform the authorities or the auto insurance company.
And finally, if you suspect it’s a scam, call the Special Investigations Unit of your insurance company and say “I’ve been scammed, I don’t think you should pay on this, I think I’ve been used by a criminal enterprise” or whatever.
Tips To Get The Best Auto Insurance Quotes
These days car insurance quotes are very much needed by the community wherever you are. You will often see someone telling you how much you will save, inviting you to search for the best auto insurance quotes. Before making the right choice of car insurance, follow these simple 5 steps to help you get the best deal:
- 1. Do a survey: The first step is making sure to do a survey of different auto insurance companies. Most of these companies have a large number of customers and their online platforms are therefore used by many people. Look at the various products, the car insurance quotes they offer and compare them with other auto insurance companies.
- 2. Pay attention to the cooperation contract: Be sure to pay attention to the corporate contract. Once you sign the document the premium priming process and insurance client are as stated in the contract.
- 3. Chose the right product: The most appropriate car insurance product is the one who best fits your needs. You are free to choose the type of insurance you want to purchase whether it’s comprehensive or total-loss-only insurance. Car insurance companies that offer the alright system will offer compensation for vehicles with all types of damages.
- 4. Provide access to complete services: This is one of the most important factors that must be considered when choosing an auto insurance. Make sure, for example, the auto insurance company has a good and accessible client service in case of an emergency, in case we needed information, we could call and easily contact the car insurance company.
- 5. Have an extensive network of partner workshops: Make sure that the insurance company you choose has a wide network of sensitive, good-quality partner workshops: make sure the location is easy to reach, the workshop isn’t censored, and has the highest standard of maintenance and spare parts according to the type of vehicle.
These are the 5 different ways to make sure you get the best auto insurance quotes in the market that best fit your needs.
Purchase Car Insurance Online: The Basics
First of all, let’s introduce this section by showing you a short clip:
Imagine the guy in the blue car is you. You just go back from Trader Joe’s, it’s been a wonderful day, you’re getting ready to get out of the parking lot, and when you are about to leave… BOOM!
The scary thing is that it’s very possible this could happen to you.
The whole auto insurance industry is built off this one statistic that effectively the average driver will file a claim for a collision once every 18 years. Obviously, this does not apply to an old person living in New York who never takes her car, but it does apply to pretty much the average driver.
If you drive a decent amount, it probably applies to you as well. The process is pretty simple: The first thing we’re going to do is basically identify the one to two best providers; step two is basically understanding the seven areas of insurance coverage, and then step 3 would be to get the two auto insurance quotes, compare and buy.
We will also cover some extra tips that we found quite useful.
Ok, first of all, if you are going to purchase auto insurance online ALWAYS use a fake email because if you use your personal email address, the next day your inbox will be littered with spam. Auto insurance companies will often aggregate the data that you give them in the auto insurance quote, and they’ll basically oftentimes sell the data to other providers, marketing agencies, etc.
So, to create an email account we will be using a service called “33 mail”. It’s free and easy to set up. You can also use the “Gmail trick” where you basically add a plus symbol and then any word and it will still send an email to your email. So, for example, if my email is “email@example.com” and I type in “firstname.lastname@example.org” it will still send to my actual email.
The next step, before proceeding to purchase car insurance online is masking your phone number. If you don’t already use Google Voice, check it out here. It’s basically an app that can forward text messages or phone calls to your actual phone without revealing your own phone number. It’s totally free and lots of people use it when they want to purchase car insurance online.
Also, you will need to give up your address. If you give your real address, that’s fine, but be prepared to receive lots of mail junk right to your doorstep for a long time (sometimes for life.)
So, what do you do? You can create a ’slightly’ fake address when you are searching and getting auto insurance quotes online. Typically, car insurance companies are discriminating based on your neighborhood. For example, if you live in downtown Detroit (Michigan) your premium is going to be two times the premium of if you lived in the suburbs of Detroit. The reason here is obviously because, in downtown Detroit, theft and robbery are much more common than in the suburbs, and so insurers basically charge higher premiums for that.
So, if you don’t want to give your actual address but at the same time you still want accurate auto insurance quotes, you do this: For example, if you live on “Weeping Willow 10” you tell them you live in “Weeping Willow 11” which is not a real address but you will still get accurate car insurance quotes without giving your address out to five different car insurance providers when you are searching.
When you finalized on a provider, you’re ready to legally sign up with them. Obviously, now you have to make sure you’re giving them your real legal address. It’s pretty easy to go back and give them your real legal address, all you have to do is just fill out a fresh car insurance quote and have your real legal address there.
There are basically two considerations when you are looking at auto insurance: obviously, we want to optimize on price, and we also want to optimize on customer satisfaction with claims. You don’t want to be in this scenario where you’ve paid for car insurance for many months, you get a car crash, you owe money and then they come back and say “Hey, we are actually denying your claim.” This is probably the worst scenario to be in so our recommendation there is to prioritize customer satisfaction with claims.
But, how do we do that?
Here, we provide you with two sources. The first one is a lot of phenomenal data about which auto insurance providers are the cheapest based on your region. That will give you a ton of amazing data for what the best prices for different conditions.
The second source is basically a standard industry survey to find the best service amongst auto insurance companies. If you are looking for the simplest, most pain-free process, you want to get this finished as soon as possible, hop to this source with customer service pick one or two of the top ones and get auto insurance quotes from them.
But, if you want to optimize everything and get the best customer service and cheapest auto insurance quotes online, you can check the first source, pick two providers, and out of those you pick the one that offers the best customer service based on the second source.
One of the biggest myths about car insurance coverage is that there is just one thing called car insurance. Well, in fact, there are actually seven different components of car insurance and it’s really important to understand all of them because you’re going to have to put in how much coverage you want for each one. (We will talk about this later on here.)
When you are searching for auto insurance online, you are going to see some of these terms over and over again:
- Minimum Coverage: The minimum amount that a state says that you’re required to have, For example, in the case of California it’s $15,000 for injury/death to one person; $30,000 for injury/death to more than one person; $5,000 for damage to property. If you live in Texas, for example, you will have different amounts.
- Full Coverage: It’s a broad term which refers to having “extra-protection.” In this case, “extra-protection” means that you’re paying more to have a higher coverage limit. A coverage limit is the amount of money that an auto car insurance company would pay out in the event of an accident.
- Premium: It’s the amount you pay each month.
- Car insurance quote: It’s the 50-minute online form you get to get that estimate.
How At Fault State Car Insurance Works
Scenario 1: You hit a $200k Tesla, the police determine it’s your fault, and you cause $20k of property damage (You have a minimum coverage of $5,000 for property.)
- Auto Insurance company will pay: $5,000
- You have to pay $15k out-of-pocket for the Tesla’s damage
- PLUS you have to pay for YOUR car’s damage
- If you don’t pay, the Tesla owner can sue you for damages (Court decides how much they are owed)
Scenario 2: If a Tesla hits you, and the police determine it’s their fault, and they cause $20k of damage:
- They are responsible for all $20k of YOUR damage
- PLUS they have to pay for THEIR car’s damage
Hopefully, at this point, you are seeing that it is extremely important to have insurance. This is not where you want to skimp out on.
All of this hinges on who the police determine is at fault. If you remember the video you saw before, we have the blue car coming out of his car parking spot, and then getting hit by a reckless driver. Astonishingly, the police here ––who didn’t have access to the security tape–– determined that both vehicles were equally at fault (yes, you read right.)
We are going to talk about what you can do to protect yourself from police coming up with different determinations. This is where auto insurance is so important, if a car ramps into you and for whatever reason it was deemed to be both at fault, you need to have something there so you’re not paying out-of-pocket from your savings for all of that damage.
So, here are some quick tips. Be sure to check these before you sign up for any auto insurance company:
1. Ask on Reddit or online forums: This may seem ridiculous but actually, it’s very useful. You can ask your questions regarding car insurance on Reddit or motor forums, and read the replies you get. (ALWAYS CONTRAST THE INFORMATION THEY GIVE YOU!!)
2. Umbrella Insurance: This is also something that you might want to think about if you are a high-net-worth individual. Basically what this does is it adds extra coverage beyond your car insurance limits so that if someone does sue you for more money you would be protected.
3. Dash Cam: Finally, we have the dash cams. This is extremely important. In that video, if that blue car had had a dashcam proof that that black car just rammed into it, it could have saved him a lot of money. This is a small investment we highly recommend. You can a good dashcam on Amazon for 80 dollars and even get packages of front-end and rear dash cams. In case of an accident, you can basically show the police your footage and say “hey actually I have proof that I was not at fault” and that will save you a ton of money and save you from increased insurance premiums from the police wrongly saying that it was your fault.
So at this point, you are ready to get one or two auto insurance quotes from the best companies. Remember the factors that can increase or decrease your premiums and then also how to fill out the form so that you get the best car insurance rate possible.
We will talk about ways to reduce your car insurance premiums more in-depth NEXT.
Dash Cam & Auto Insurance Fraud Videos
I bet you’ve never seen a car accident like this before…
A scammer tries to get his insurance company to pay for his “accident”. Unfortunately for him, the dash cam reveals the scheme and he returns home with nothing.
When you mistake gas for brake… Luckily no one was injured.
RT News Agency reports two people inside a car were injured after a strong collision with a road pole in Hong Kong. Both passengers managed to survive.
Tips to Reduce Your Car Insurance Premiums
Let’s follow these easy tips to get cheap car insurance premiums:
Annual Mileage: This is actually a huge point that either increases or decreases your premium. So, let’s see how we can optimize this value. Ideally, you want to try and make this as low as possible while still being truthful, so COVID-19 is a perfect time to go ahead and re-do your car insurance rates because you can pretty much just cite your COVID-19 driving data, which is probably less than 5,000 miles per year, and get a significantly less car insurance premium because of that.
IMPORTANT: Car insurance companies will take advantage of people who don’t understand the system, so take your 30 minutes to go and learn about it. It will benefit your life.
Get separate auto insurance quotes for different jobs that you might have: Perhaps you’ve noticed that car insurance companies basically discriminate based on what type of job you have. For example, if you are a homemaker or an executive or you work in tech. If you have the advantage you have two different jobs, you can try and get two different quotes and just pick the one that’s lower.
|Professor w/ College Degree||$71.68|
Raise Your Deductible: Another way to save on your car insurance premium is by increasing the deductible. If you are not sure what a deductible is, it’s basically the amount that you agree to pay in an accident before the insurer comes in and pays how much they have to pay.
Let’s say the deductible amount it’s $1,000. In case of an accident, if the total cost it’s, let’s say, $5,000 you would first pay $1,000, and then the auto insurance company would pay the other $4,000.
SCENARIO: If there is $3,000 worth of damage to your car, and you have a deductible of $500, you will pay $500 if you are at fault and then the car insurance company will pay you $2,500 but you will be paying “X” in premiums every year.
But if your deductible is higher, let’s say $1,000, you would pay that amount from your pocket and the auto insurance company would pay the rest ($2,000) BUT you would have cheaper premiums (“X” – $165.20 a year.)
See? In this case, you actually managed to reduce your premium by $165 per year. This is one of the best ways to reduce your car insurance premium. Of course, if you’re raising your deductible that means that you should have that money to chip in the case of an accident, but if you are a safe driver and you are pretty sure you’re not going to be at fault in an accident, we recommend doing this.
Your driving records: Auto insurance companies will basically check your driving record to see what tickets and violations you’ve had and raise your premium if you have any of them. Sometimes, your ticket does not actually show up on your driving record. Basically what you want to do is check your driving record in every state that you’ve lived for the past three years. If it’s clean, you can report what your driving record says.
Always bulk pay: Auto insurance companies are going to give you options to pay 6 months in advance or even 12 months in advance. You want to pick these options over paying month-by-month because they are going to give you a discount for paying upfront and in advance.
Bundle pay: The other really good benefit is basically bundling. If you ever need renters insurance, homeowners insurance, add those kinds of from the same provider because they will give you a discount for having all three.
Multi-person Policies: Finally, what you want to look into is also a multi-person policy. This depends on the auto insurance company but some of them will ensure non-family members in your household. For instance, if you have a roommate you could be eligible to have them on the same plan, and typically multi-person policies are going to be 20% cheaper than single-person policies.
If you have someone who is a bad driver or a new driver, their rates are just going to be very high. If you add those people to your driving insurance policy, you might pay more than if it had just been by yourself.
Don’t bother with insurance brokers: They are filling out exactly the same online quotes that you’re filling out and thanks to the internet, today you have all the information that they need. There’s little advantage to having a broker and of course those rates that they give you are going to be higher because they need to support themselves.
Check discounts for associations: There are also good discounts for people who are in certain associations. It could be a university organization, veterans association, occupational associations… If you do fall into those categories though, make sure you test that quote against a regular quote because sometimes the difference might not be as much.
Now let’s think about how to keep your auto insurance premium low in the long term:
Defensive driving: Car insurance data indicates that the average driver will file a claim for a collision once every 17.9 years. So, just like casinos do, car insurance providers assume you are going to have an accident every 18 years and they play with the odds. Notice that any kind of moving violation is going to be on your record for three years and increase your premium for that amount of time.
Get the right company: Car insurance companies are going to actually increase your premium every year that you stay with them which is crazy and incredibly stupid. Why do they do this? The reason is that they notice that you are not moving around and they need to make money so they raise it.
One of the biggest recommendations is to change your car insurance every couple of years at a minimum. If you don’t have to change the product, just call them and tell them “hey, I noticed my insurance is going up, can you offer me any good deals?”