Staged car accident scams

A staged car accident is a crash that criminals cause or fake on purpose so they can file insurance claims, usually for injuries to passengers and medical treatment that may never have happened. Some schemes involve only the fraudsters and their own insurers; others target an innocent driver, who is made to look at fault. If a crash feels set up, call the police, document everything, count the people in the other car and tell your insurer you suspect fraud.

Three kinds of fraudulent crashes

The National Insurance Crime Bureau (NICB) sorts fraudulent crashes into three groups:

• Caused accidents. A criminal deliberately collides with an innocent driver, usually in a way that makes the victim look at fault.
• Paper accidents. The crash never happened. It exists only in an insurance claim and sometimes a police report, often described as a private-property crash or a hit-and-run.
• Staged accidents. Everyone involved is in on it. Vehicles are positioned to simulate a collision, sometimes using cars with prior damage, and passengers are given roles and scripts.

Staged and caused crashes are a form of hard fraud: deliberately creating a loss rather than exaggerating a real one.

Common setups

The swoop and squat is the most dangerous of these on highways and gets its own guide: the swoop-and-squat scam.

Why criminals stage crashes

The money is mostly in injury claims. NICB says many staged crashes are organized by groups that work with lawyers, medical professionals and clinics, extending the fraud into medical billing. Passengers may claim soft-tissue injuries such as whiplash, which NICB notes are hard to detect with medical instruments. NICB names Florida, New York and California as hot spots and says staged crashes are more common in no-fault states, where each driver's own personal injury protection pays medical bills regardless of fault.

Warning signs at the scene

• The car ahead stopped suddenly for no visible reason.
• The other car is full of passengers, and they all claim to be hurt.
• People who seemed fine start holding their necks or acting injured, especially when police arrive. The Coalition Against Insurance Fraud flags occupants who are joking one minute and injured the next.
• A "witness" appears out of nowhere to back the other driver's story. NICB says these witnesses are often part of the scheme.
• The other driver discourages calling the police or insists on settling privately.
• A stranger at the scene, or a caller soon after, steers you toward a particular clinic, lawyer, body shop or tow company.
• The other vehicle has old damage that does not match the crash.

What to do if you suspect a setup

1. Call the police and get a report, even for minor damage. The Coalition recommends a police report for every suspected setup.
2. Stay calm and do not argue about fault. Stick to facts with the other driver and the officer.
3. Count and identify everyone in the other car. Get names, phone numbers and driver's license details, and note where each person was sitting.
4. Photograph everything: the vehicles, damage, plates, the scene, the occupants and any witnesses. Note the time, location and traffic conditions.
5. Save dashcam footage immediately; see dash cams and car insurance.
6. Use your own providers. See doctors, lawyers and repair shops you choose, not ones recommended by strangers at the scene.
7. Tell your insurer you suspect fraud when you report the claim. Insurers' special investigations units handle these cases.
8. Report it to the NICB at 800-835-6422 or through your state insurance department; how to report insurance fraud lists the options.

The after-accident checklist and information form helps you capture the details in the moment.

What the law says

Staging a crash is insurance fraud, and some states have provisions aimed squarely at it:

• California. Penal Code section 550 makes it a felony to knowingly cause or participate in a vehicle collision in order to present a false claim, punishable by two, three or five years and a fine of up to $50,000 or double the amount of the fraud. It adds two years for each person other than an accomplice who suffers serious bodily injury.
• Florida. Statute 817.234(9) makes organizing, planning or knowingly taking part in an intentional crash, or documenting a crash that did not occur, a second-degree felony with a minimum of two years in prison.

Penalties elsewhere vary; see penalties for auto insurance fraud.

Why it matters even if you are never targeted

Fraud costs are passed on to policyholders. The Coalition Against Insurance Fraud estimates insurance fraud of all kinds costs U.S. consumers at least $308.6 billion a year, and the NAIC cites an FBI estimate that fraud costs the average family $4,000 to $7,000 in higher premiums over 10 years. Victims of caused crashes can also face an at-fault claim on their record and months of dealing with lawyers and adjusters. auto insurance fraud explained covers the wider picture.

Key takeaways

• Fraudulent crashes are caused, staged or entirely on paper, and the money is mostly in injury and medical claims.
• Sudden unexplained stops, carloads of "injured" passengers and instant witnesses are classic warning signs.
• Call the police, document every occupant and the scene, save dashcam video and tell your insurer you suspect fraud.
• Choose your own doctors, lawyers and repair shops rather than ones recommended by strangers.
• California and Florida treat staging a crash as a felony with prison time.