Will Mann

This week’s installment is going to be a little different. There is no claim story, no contract issue, nobody stole anything, and an employee didn’t back into a brand new Porsche (this actually did happen once).

As a part of my duties I try to keep myself updated on what’s going on in the equipment rental industry, but also what is going on in the insurance industry. What are the new trends, laws and court cases out there that are relevant to the rental industry? In the last few weeks I have noticed one recurring theme — fraud. Specifically, auto insurance fraud.

Just a few weeks ago, one of the largest auto insurance fraud rings ever was taken down by the authorities on the East Coast. How can you spot this kind of fraud and how do you protect yourself and your business from auto schemers?

There are several types of auto accident schemes, but these three are the most common:

1. Panic stop: The victim is driving and the perpetrator positions his/her vehicle in front of the victim and purposely slams on the brakes to cause a rear-end accident. Perpetrators have been known to intentionally disable their brake lights to facilitate the crash.
2. Drive down: The victim is motioned into traffic from a merge lane by the perpetrator, who then purposely speeds up and causes a collision. The perpetrator simply denies motioning the victim into traffic. This is very common where vehicles have to merge into traffic, such as four-way stops, T-intersections, merge signs, yield signs, lane closures, enter/exit ramps and when pulling out of parking spots.
3. Swoop and squat: This is the most common scheme. It involves two perpetrator vehicles and one victim vehicle. The squat vehicle positions itself in front of the victim and the swoop vehicle speeds up and cuts the squat vehicle off causing the squat vehicle to slam on its brakes, causing a rear-end collision. The swoop vehicle quickly leaves the scene. The victim states that the swoop vehicle caused the accident, but since that vehicle can’t be identified, the victim’s insurance carrier pays the damages and injury claims.

Information provided by the National Insurance Crime Bureau (NICB) website, nicbtraining.org.

Statistics show that perpetrators of these schemes specifically target newer, rental and commercial vehicles because they are more likely to be adequately insured. How do you protect yourself from these schemes?

Always remember to write down license plate numbers, take photos of all vehicles and all parties involved, gather as much information as possible and call the police. Also, following classic defensive driving rules of keeping, at a minimum, of two vehicle lengths of space between your vehicle and the vehicle in front of you at all times can help. Lastly, if it seems strange, it probably is. Don’t be afraid to contact the police even for minor accidents. Please contact me for more details on fraudulent schemes and the ways to avoid them.

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This item, provided by ARA Insurance, Kansas City, Mo., is the story of a real-life insurance claim involving a rental store and is intended to help readers better understand and manage risk. For more safety and risk management information, customers of ARA Insurance can log on to ReSource. Access is free, so if you haven’t signed up yet, contact your agent or call 800-821-6580.