Auto Insurance Scams Worthy of Jail Time

Auto insurance scams may seem like a tempting way to get money, they are extremely dangerous to both your health and freedom. If you're caught pulling a scam on your auto insurance company you can expect to have to deal with heavy duty fines, a criminal record, and even in some cases jail time.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Mar 30, 2021

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Auto insurance schemes have existed for decades resulting in insurance companies being very aware of the day to day scams. While some of these may sound tempting at a glance, many of them are extremely dangerous for both your health as well as your freedom. Get caught pulling a scam on your auto insurance company and you can expect to land yourself heavy duty fines, a criminal record as well as potential jail time.

Here are a few auto insurance scams, how they work and how to identify them

The Hit & Run

hit and run
Often times people bump into another car in a parking lot or back into a telephone pole. Instead of being honest and actually paying for the accident themselves they call their insurance company and try to claim they’ve been hit and run.

While once in a while people do get away with this, Auto insurance inspectors are trained to identify both what type of material hit your car as well as the angle. If it was obvious you were the one who caused the damage you could be charged with fraud.

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The Stolen Car

One of the biggest scams in the auto insurance industry is fraudulent car theft. Often times people will have somebody steal their car and write it off. People often do this if the car is not sellable at the blue book value or if they are stuck financing a car they can no longer afford.

If your car gets stolen you will be asked a series of questions that are intended to detect whether you arranged the car theft or if it was indeed a legitimate claim. If you get caught you can expect large fines, a criminal record and potential jail time.

The Swoop & Squat

This is an insurance scam where another driver will try and arrange for you to intentionally rear-end them. How it works, is they will abruptly swing swoop their car out in front of you and stomp on the breaks. Simultaneously the person in the lane beside you will speed up so you can’t swerve your car out of the way. All the people in the car you hit will claim injuries and will most likely sue your insurance company.

This scam is harder to detect, the best thing to do is try and get as many witnesses as possible to try and prove your point.

The T-Bone

The T-Bone is one of the most orchestrated insurance scams out there. The T-Bone scam requires quite a few people in order to pull off. The first thing scammers do is find an intersection with virtually no foot traffic or potentially participating witnesses. The perpetrator will wait for a car to drive through the intersection and intentionally T-bone the oncoming car. The planted witnesses will then claim the victim ran the stop sign or a red light resulting in the scammer being able to claim injuries on the victim’s insurance plan.

Both the swoop & squat and the t-bone are highly illegal. If you are caught orchestrating either of these scams you should be prepared to spend some lonely nights in jail.

While many of these scams may sound slightly enticing to criminal, they are also part of the reason insurance plans have become more expensive over the years. If you hear of an insurance scam, make sure to report it; ignoring criminal activity causes everybody’s rates to increase.

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