Auto insurance fraud is considered as a “big business” for criminals. Fraudulent accidents also tend to increase dramatically during economic downturns. During a difficult economy, it is much easier for criminal rings to recruit desperate new members. According to the National Insurance Crime Bureau, these criminals often target commercial fleets since they are perceived to have better insurance policies.
Insurers lose a lot of money due to fraudulent accident claims. The average accident claim costs insurers $22,000 and jumps to over $331,000 when an injury is involved. This number further increases to over $1 million in the case of a fatality.
Due to the conservative nature of insurance companies, they pass the costs of these increased risks to all of their insured fleets in the form of higher premiums. Even a single claim could increase the average driver’s policy by over $330 per year. This number is compounded for multi-vehicle fleets. A significant increase in insurance premiums could drain the profits out of a commercial fleet.
There two primary steps that fleets can take to ensure that they aren’t victims of staged accidents.
Driver can be trained on how to recognize the various types of staged accident tactics. Drivers could potentially avoid them if the are aware of the common methods used by criminals.
Dash cameras record everything taking place on the road and in the cab. They will retain all recordings during crashes. Fleet managers can review what was taking place both in the cab and on the road when the accidents occurred. The recordings from the accidents would be indisputable evidence to prove that the accident was staged.
It is in the best interest of commercial fleet managers to protect themselves from auto insurance fraud. Proper driver training and the use of dash cameras could prove to be invaluable tools to protect fleets from auto insurance fraud.