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Unscrupulous and dishonest collision repair operators contribute to the nation's
insurance fraud problem. Recognizing this fraud can help consumers avoid becoming
victims.
The Schemes
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Airbag Fraud
- Dishonest collision repair shops utilize stolen, previously deployed and
salvaged airbags to replace a customer's deployed airbag. Shops purchase
these airbags for a minimal amount ($100-$200) and then bill the insurer for
the retail value of a new airbag. Some unscrupulous shops will attach a
deployed airbag to the steering wheel of a vehicle that contains a
non-deployed airbag, creating the illusion there was a deployment and
thus increasing the claim value.
-
Bandit Tow Trucks
- Tow truck drivers arrive at an accident scene and persuade the vehicle
owner to allow them to transport the vehicle to a supposed "legitimate"
collision repair facility. Once there, the vehicle is held hostage with
demands for an insurance company payment. The tow truck driver may also
try to refer the vehicle owner to unscrupulous doctors and attorneys.
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Burying the Deductible
- The vehicle owner and collision repair shop conspire to "bury the
deductible," or hide the cost in the estimate, so the insurance company
pays the deductible instead. One way the deductible cost is passed to
the insurance company is for the shop to bill for an original equipment
manufacturer part, but then really install a cheaper aftermarket part,
repaired damaged part, or junk part.
-
Chop Shops
- "Supposed" legitimate collision repair shops fronting for facilities
where stolen vehicles are disassembled and sold piece-by-piece to other
disreputable repair shops.
-
Inflated Damage Estimates
- Estimated charges for work that will intentionally never be competed or
for parts that will never be installed. Shops may also inflate the
estimate by escalating the amount of damage already done to the
vehicle.
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Kickbacks
- Collision repair shop owners "pay off" adjusters to refer claimants.
See Also:
Staged Vehicle Collisions
Vehicle Theft Fraud
Other Vehicle Claims Fraud
Bodily Injury Insurance Fraud
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