6 tips for avoiding a staged car accident

Fact-checked with HomeInsurance.com

Right Turn Drive Down

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Which bank should I choose?

Get personalized bank recommendations in 3 easy steps.

Staged traffic accidents are on the rise, endangering the lives and boosting the car insurance rates of innocent drivers who may unwittingly think they’re at fault.

Questionable claims from staged accidents increased 46.3 percent from 2007 through 2009, according to the National Insurance Crime Bureau, or NICB, a nonprofit agency in Des Plaines, Ill., funded by 1,100 property and casualty insurance companies nationwide to fight car insurance fraud and vehicle theft.

According to the NICB, the top five staged accident states for the period were Florida, 3,006; New York, 1,680; California, 1,619; Texas, 792; and Illinois, 433. The five cities with the most staged accident questionable claims were New York, 1,304; Tampa, Fla., 562; Miami, 511; Orlando, Fla., 422; and Houston, 376.

Auto insurance fraud added $4.8 billion to $6.8 billion to auto injury claim payments in 2007, according to the Insurance Research Council’s November 2008 study “Fraud and Buildup in Auto Injury Insurance Claims: 2008 Edition.”

Staged accidents
These three videos from the National Insurance Crime Bureau illustrate some popular staged accidents.

NICB investigations in Florida, New York and California uncovered sophisticated, multistate rings that included the staged accident participants as well as doctors, chiropractors, lawyers and even body shop owners that profited from the car insurance scam.

“A lot of these are $1 million-plus claims cases,” says Roger Morris, NICB chief communications officer. “That’s what they’re in this for, the medical side of it. You can see $200,000 in claims before you know it.”

Multiple claims for one accident

One common element runs though most staged accidents. The “victim” vehicle will contain three or four passengers who will file medical claims against the victim’s car insurance company in addition to a car damage claim.

Staged accidents are most common in “no-fault” states such as Florida and New York, where the insured stager can collect for bodily injury from their own car insurance company through their personal injury protection, or PIP, coverage.

Morris says the stagers often target young women and older adult drivers as they enter or exit a shopping mall or parking garage. If you are talking on a cell phone or appear otherwise distracted while driving, you’re a perfect mark.

“There will be somebody sitting there at the curb and you pull up and they will wave you on by. The next thing you know, you’re getting blocked and then getting clobbered,” he says. “Don’t always assume that it was an accident; it may well have been deliberate.”

The NICB trains law enforcement and special investigations units of car insurance companies to recognize the patterns of staged accidents. “When they see multiple people going to the same clinic and multiple claims from one accident, that’s what they need to look for,” Morris says.

Avoiding a staged accident

Here are six tips from the NICB on how to avoid becoming a victim of a staged accident:

  • Avoid tailgating. Recognize the “swoop and squat” scenario in which a driver suddenly swoops in front of you then slams on his or her brakes, and leave plenty of distance between you and the vehicle in front of you just in case the driver slams on his brakes.
  • Call the cops even if damage is minimal. A police report makes it harder for a stager to intentionally damage his or her car later in order to collect a larger claim against your car insurance company.
  • Grab a camera or use your cell phone to photograph everything and everyone at the scene. Pay special attention to the number of people in the other car and the damage to both cars.
  • Be wary of passers-by who just happen to arrive on the scene, especially if they offer to direct you to a doctor, lawyer or tow-truck company. They may be part of the scam.
  • Steer clear of tow-truck drivers that you did not summon. They are often part of this car insurance scam.
  • Be wary of doctors who insist that you file a personal injury claim following an accident, especially if you are not hurt.

If you suspect that you’ve been a victim of or witness to a staged accident, you can report it anonymously through the NICB website, or by calling the toll-free number (800)835-6422 or by texting your information to TIP411, keyword “FRAUD.”