In my submit about illegal immigration, a commenter identified that I used to be fortunate to keep away from larger monetary penalties from my “automobile accident.” It seems that the maneuver the place a automobile accelerates from a cease after which immediately slams on the brakes is a standard insurance coverage rip-off. This tactic is called the “sudden cease” or “brake verify” scheme.
I began researching extra about any such fraud as a result of it had crossed my thoughts throughout the accident. Out of nowhere, after accelerating arduous, the automobile in entrance of me slammed on the brakes for no obvious cause—she had the appropriate of means on the intersection. Fortunately, I used to be transferring slowly, barely reaching 3 mph towards the cease signal, earlier than slamming on my brakes and bumping into her automobile.
Might Have Been A Setup
Later that night, a reader from San Francisco reached out, sharing an analogous expertise from simply the opposite month. What was outstanding was that it occurred on the identical intersection: the three-way junction of Sloat Blvd, Skyline Blvd, and Lake Merced Blvd.
And once they pulled over on the identical spot on Skyline Blvd, simply earlier than Zoo Street, the opposite driver was additionally a lady who didn’t communicate English. Conveniently, there simply so occurred to be a person on the facet of the street who may translate for her. What are the possibilities?
That made me replay the small print of my very own encounter. It occurred at 2:57 pm on a Thursday, and the one different factor I remembered was seeing folks in a automobile coming from Lake Merced Blvd who had been watching and laughing, as in the event that they knew it was a setup. How unusual, I keep in mind considering.
Have been we victims of a staged automobile collision? I’m unsure since no cash was extracted from me or my insurance coverage firm. Perhaps once they pulled over, they anticipated to see injury to her previous automobile. However attributable to my reflexes, there wasn’t any, so they only determined to let issues go.
Sadly for the reader, there was injury to the entrance particular person’s automobile. So she is within the means of coping with her insurance coverage firm now.
In case you are a frequent driver, beware that you might be getting arrange for automobile insurance coverage fraud. For those who don’t suppose automobile insurance coverage fraud impacts you, suppose once more. Billions of {dollars} are misplaced to fraud every year, driving up premiums for everybody.
I needed to do extra analysis!
Case Examine on Automobile Insurance coverage Fraud
Under is the very first thing I discovered about automobile insurance coverage fraud from California’s Department of Insurance. Los Angeles, which accounts for almost 43 % of all auto-related insurance coverage fraud in California.
On February 24, 2021, Zandra Monterrozo, 44, of Corona, pleaded responsible and was sentenced for her involvement in an organized ring that staged automobile collisions to gather over $135,000 in fraudulent insurance coverage payouts. Eleven different suspects, which included physique store house owners, had been additionally charged or prosecuted.
Listing of 11 extra suspects:
- Bethuel Guevara Aguirre, 39
- Monica Elizabeth Sosa Alonzo, 39
- Baudilio Enrique Noguera, 49
- Juan Venancio Juarez Miranda, 49
- Carlos Enrique Lopez, 56
- Emma Amparo Lemus Martinez, 59
- Osmar Fernando Lopez, 40
- Alfonso Leon Baltazar, 51
- Mario Renee Alonzo, 67
- Marcos Farias, 70
- Walter Chacon, 31
Monterrozo was sentenced to 1 felony depend of insurance coverage fraud, ordered to pay $6,000 in restitution, and served one 12 months of probation. I am unsure what occurred to her different potential accomplices.
The rip-off entails one automobile deliberately braking shortly with out cause, giving the motive force behind little time to react, inflicting a rear-end collision. The investigation revealed the ring was answerable for eight staged collisions involving harmless victims, and two collusive ones, leading to $137,832 in losses for victims and varied insurers.
Sounds rather a lot like what each a reader and I skilled.
How the Brake Test Rip-off Works
Right here’s how scammers revenue from the brake verify scheme, usually with the assistance of a mechanic or clinic.
After forcing a collision, the scammer claims minor injury, like $1,000. They then enlist a shady mechanic who “finds” a further $5,000 price of harm. The mechanic payments the insurance coverage firm $6,000, they usually break up the additional $5,000 that was by no means spent on repairs.
Along with damages, scammers could declare medical points like whiplash or again ache to inflate their payout. With a number of passengers, every particular person can file separate claims for “accidents,” probably incomes much more. Ideally, a fraudulent clinic is concerned, so the scammers can break up the insurance coverage funds from faux medical therapies as effectively.
One other strategy to extract cash from the sufferer is thru intimidation. After the accident, the scammers could demand money or valuables, with the translator immediately changing into a threatening determine. If there’s little injury to the scammer’s automobile they usually consider the insurance coverage firm gained’t pay out, the brake verify incident can escalate right into a mugging.
Crimson Flags of a Staged Collision
For those who suspect you are a sufferer of a staged collision, look out for these indicators:
- The opposite automobile is stuffed with passengers to extend the potential quantity for monetary payout.
- The driving force has a brand new insurance coverage coverage or no insurance coverage coverage.
- Their automobile is in poor situation or has a salvage title.
- Site visitors was flowing easily, however they stopped immediately.
- The driving force and passengers all declare harm regardless of minimal injury.
- There are random witnesses who all occur to be of the identical background of the opposite driver.
Video of Brake Checking and Different Reckless Driving Habits in Motion
One widespread criticism I acquired from readers is that the accident was totally my fault since I rear-ended the automobile. I acknowledged that it may have been, even with the sudden braking, and had no downside exchanging ID and insurance coverage data.
Some readers stated I used to be out of line for asking for the opposite driver’s ID and insurance coverage. My dangerous. I believed it was commonplace protocol, since that’s what you do when coping with the police or any visitors incident. I haven’t been in a automobile accident since school, and I desire understanding who I’m coping with after an accident.
Others blamed me for tailgating. I don’t find out about you, however once I’m at a cease signal or pink mild, I sometimes go away about three toes of house—sufficient for somebody to comfortably stroll between the automobiles. Tailgating doesn’t appear as related when the automobiles are stationary. If a automobile immediately accelerates and slams on the brakes, even from a standstill, it is arduous to react shortly sufficient.
One of these response is without doubt one of the causes automobile insurance coverage fraud via brake checking is such an efficient rip-off. If the motive force within the rear is all the time blamed, regardless of the circumstances, scammers are incentivized to make use of the brake verify scheme to money in.
For many who insist the entrance driver is rarely at fault, try this video that exhibits quite a few examples proving in any other case. Earlier than leaping to conclusions, keep in mind there are all the time two sides to each state of affairs.
Is Defrauding Auto Insurance coverage Corporations Price It?
I am all for side hustles to make more money, however auto insurance coverage fraud does not look like a very good return on effort. Take the case of Zandra Monterrozo. She collected $137,832 in fraudulent claims, however it took eight staged collisions with harmless victims and two collusive crashes to get there. Staging 10 collisions is loads of work!
Not solely is it time-consuming, however there’s additionally the danger that the insurance coverage firm may not pay out. In the event that they don’t cowl a minimum of the automobile’s injury, you might find yourself shedding cash. And it is unlikely that fraudulent claims have a 100% success charge, particularly when insurance coverage corporations are skilled at recognizing these scams.
One other draw back of insurance coverage fraud is having to share the income. Monterrozo needed to break up the $137,832 with 11 different folks. That brings the typical payout per particular person to simply $11,488. Even when some took extra and others much less, it’s arduous to think about the ring chief strolling away with greater than half the full quantity.
One other draw back is moving into an accident with the unsuitable sufferer. What if the particular person does not keep calm like I did and as an alternative pulls out a knife or gun to retaliate? The sufferer may simply get pissed off as a result of they’ll suppose the accident was your fault. That’s a threat that doesn’t appear price taking.
Lastly, there’s the danger of getting caught. Monterrozo acquired a comparatively mild sentence—$6,000 in restitution and one 12 months of probation. With such lenient penalties, it is simple to see why some scammers could be tempted to strive once more.
Let’s Have Compassion For The Victims Of Insurance coverage Fraud Too
Whereas it is tempting for fraudsters to use the system, it is not a sustainable or risk-free strategy to make cash. For the typical particular person, collaborating in an organized scheme like this isn’t well worth the authorized and monetary penalties.
I perceive that determined occasions can result in determined measures. Empathy for perpetrators is a key precept for reformative justice advocates. In case you are poor or an unlawful immigrant with out many monetary choices, the temptation to partake in a automobile insurance coverage rip-off for a fast $500 is comprehensible.
Nevertheless, if we’re going to take a softer method to crime, we should additionally guarantee victims are compensated for the injury and struggling they endure too. Let’s not deal with criminals higher than law-abiding residents.
Advice For Drivers To Defend Themselves In opposition to Automobile Insurance coverage Fraud
Now that you simply’re conscious of the brake verify scheme and different staged collisions used to rip-off insurance coverage corporations, listed below are some steps to guard your self:
- Set up a entrance and rear-facing digital camera that repeatedly information whilst you drive. This offers essential video proof in case you’re concerned in a staged collision. One advice my shut buddy makes use of is the Pulse P12 Pro 4K Mirror Dash Cam. It prices about $200-$300 to put in.
- Drive a modest however secure automobile. Stagers usually goal high-value autos like business vehicles, luxurious automobiles, or government-owned autos, as these are virtually assured to have insurance coverage protection. Automobile insurance coverage fraud is one more reason why working towards Stealth Wealth is necessary. You change into much less of a goal.
- All the time insist on a police report on the scene of the accident, and ask the officer to positively establish all events concerned.
- Totally doc the accident. Use your mobile phone to take images or movies of the collision, together with any injury to the autos.
- Report the suspicious collision to your state’s Division of Insurance coverage. They might have helpful data and assets to help you.
- Contemplate getting tinted home windows. Relying on the place you reside, you might be legally allowed to tint your home windows as much as a sure restrict. Contemplate going to that restrict. The darker your tint, the tougher it’s for others to see. This creates extra threat for fraudsters to choose on you.
- Get the appropriate insurance coverage insurance policies. Along with reviewing your auto insurance coverage coverage, it’s price contemplating an umbrella policy for added legal responsibility safety. Communicate along with your insurance coverage supplier not solely about automobile insurance coverage but in addition about scams just like the brake verify scheme. Ask for his or her suggestions on the suitable protection quantities for every sort of insurance coverage to make sure you’re totally protected.
No one Actually Cares, So You Should Be Vigilant
Accidents occur on a regular basis. Even when you’re the sufferer of fraud, folks will nonetheless discover a strategy to blame you, usually exhibiting little sympathy in your state of affairs. And when you admit the accident was totally your fault, folks will soar on the likelihood to tear you aside and take full benefit.
It’s a troublesome world on the market, people. Defend your self and keep secure!
Reader Questions
Have you ever ever been a sufferer of automobile insurance coverage fraud or another sort of insurance coverage fraud? In that case, how did it occur, and the way a lot did the perpetrators get away with? For those who work within the auto insurance coverage business, I’d love to listen to your insights on automobile insurance coverage fraud. What’s the denial charge, and the way usually do insurance coverage corporations detect fraudulent claims?
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