Car Insurance Referral Fraud

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There are many scams associated with car insurance. They can come in many forms and can all cost you a lot. Policyholders often end up paying a lot of money to cover incorrectly charged or overpriced insurance claims. This is a way to pay a lot of money for someone else’s greed. These scams can be avoided by being educated consumers. This will help keep your car insurance premiums down. We will share tips and tricks to help you avoid these car insurance referral scams.

How does a car insurance referral scam work?

Towing truck drivers may be paid by lawyers a fee to refer victims of personal injury car accidents to them. This is illegal. This is also illegal. An auto body shop may pay a tow truck driver a fee to transport cars that have been damaged. This is also a crime. These tow truck drivers are known as “chasers” in the insurance industry. A tow truck driver may not be allowed to refer an accident victim directly to a repair shop, especially if they are paid a referral fee.

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Many auto body shops have their own “chasers” or control them. These shops can be contacted by insurance companies. Your car will need to be taken to another shop if the insurance company doesn’t recognize the place where it was towed. You may have to pay the storage fee, towing fees, and other administrative fees before this happens. These fees can run into the thousands, and your auto insurance might not cover all of them. The auto body shop may place a lien on the vehicle and then sell it to recover the fees. These referral fees can be recovered by lawyers, tow truck operators and doctors, as well as auto body repair shops. You, the policyholder, are ultimately responsible for paying the bill.

How can you combat insurance frauds against auto insurers?

Make sure you are well-informed and educated. You may need to consult a doctor, a lawyer for personal injury, or a tow truck operator if you have questions about your rights as an accident victim. Here are some tips:

Tow Truck

  1. Before you hire a tow truck company, make sure they have a valid license.
  2. You should verify that the tow truck company is affiliated with Triple A (AAA), or another automobile organization.
  3. You should verify that the tow truck company has a contract in place with any local, county or state law enforcement agencies.
  4. Pay attention to any red flags. Is the driver willing to recommend a repair shop? This could indicate that the driver has a financial interest at that shop.
  5. Make sure you read all terms and conditions before signing any contract or invoice the driver of your tow truck asks.
  6. Ask the driver for permission to transport your car to a safe location so that the appraiser or insurance adjuster from your auto insurance company can evaluate the damage.
  7. For information about towing services or where you can take your vehicle to be repaired, call your auto insurance company immediately.
  8. Consider having your vehicle towed to a preferred body shop. There are some auto insurance companies that use preferred repair shops. This agreement guarantees that your vehicle will be repaired to the highest standards. Call your auto insurance company for more information.
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To report fraud in auto insurance, who can I contact?

Report to your state’s insurance regulator if you suspect you have been the victim of fraud in auto insurance.

Lawyers

  1. You should ensure that the lawyer you are referred to is licensed to practice law within your state.
  2. Ask them upfront about their rates and payment plans for your situation. Also, ask how they will benefit you if their services are hired.
  3. For any complaints, please contact your state’s bar association.

Providers of Health Care

  1. Ask them if they are licensed in your state to practice as a healthcare professional.
  2. Ask them how much they charge and if they accept payment from your auto or health insurance companies. If not, they may charge additional fees.
  3. To find out if any complaints have been filed against a health care provider, check with their state licensing board.

Consumer fraud can take many forms. You have the responsibility to learn what is legitimate and what isn’t. We hope that our advice will reduce your chance of falling prey to auto insurance referral fraud.

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