For Release: July 23, 2008
Media Calls Only:
916-492-3566
Insurance Commissioner Poizner Warns Sacramento Drivers to be Alert for Staged Auto Collisions
Schemes Used by Scam Artists Endanger Other Drivers, Cost Unsuspecting Public
SACRAMENTO ― With summer vacation looming and many Californians traditionally driving more frequently or longer distances, Insurance Commissioner Steve Poizner warned area drivers to be alert for staged auto collisions. In 2007-2008, 14,623 referrals out of 23,734 insurance fraud referrals received by the California Department of Insurance - 61 percent - were for suspected automobile insurance fraud.
"Insurance fraud is like a $500 tax on every man, woman and child in California, and auto insurance fraud is a major part of this problem," stated Commissioner Poizner. "Staged collisions are not victimless, even when no one is injured, and an aware public is part of a great defense against these dangerous criminals."
More than $182 million could have been lost by insurance companies in 2007-2008 if the auto insurance fraud was not discovered. Actual loses, however, are subsequently built into the insurance companies' pricing structures.
In Sacramento there were 802 suspected fraudulent claims (SFCs) in 2007-2008. That's down from 856 SFCs in 2006-2007 but up from 788 in 2005-2006. In Sacramento County, potential losses were $5.6 million in 2007-2008 up from $5 million in 2006-2007 and comparable to the $5.8 million in potential losses in 2005-2006.
There are primarily three schemes typically used in staged collisions:
o Panic stop
o Start-and-stop
o Swoop-and-squat
People who create these pre-planned accidents, also known as stagers, look for high value targets, such as commercial vehicles, expensive luxury vehicles, and vehicles owned by cities or counties. They are considered "high value" because of the virtual guarantee of insurance coverage.
The following signs may tip-off a driver of fraudulent activity:
o The other car is packed with passengers;
o The other driver has a relatively new insurance policy;
o The other car is in poor condition or has a "salvage" title;
o Traffic was flowing smoothly and the other driver stopped suddenly;
o The other driver and/or the passengers make extra effort to avoid conversation
about the other vehicles in the area;
o There is a witness that substantiates everything the other driver says; and
o The other driver and his passengers all claim injury despite relatively minor
collision damage to the vehicles.
If someone suspects he is the victim of a staged collision insist on a police report; document as much information from the collision scene as possible, using a cell phone to take photographs or video; ask the peace officer to positively identify everyone involved, report it to CDI at 800-927-HELP (4357) or go to:
www.insurance.ca.gov
.
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Please visit the Department of Insurance Web site at www.insurance.ca.gov. Non media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Callers from out of state, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
