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Car Insurance Fraud: Tips to Keep You Safe
Lately, if you've been keeping an eye on the news in Singapore, you may have noticed a significant increase in reports about car insurance fraud.
What should you be vigilant about?
Many recent cases of car insurance fraud have been orchestrated by large-scale syndicates. Typically, insurance fraud investigators uncover sophisticated operations, sometimes involving over 100 individuals playing various roles as recruiters, vehicle suppliers, drivers, and fake passengers. These groups rely on ensuring their victims are framed as the party at fault in a carefully staged accident, making them responsible for covering the costs of repairs and medical treatment resulting from the accident. A popular scam involves staging an accident and then pressuring victims to claim on their car insurance, often under the guise of car repairs or personal injury fees.
One such investigation led to the conviction of a former dispatch rider, sentenced to six years and two months for his involvement in staging 21 car accidents. The fraudulent insurance claims in this case amounted to up to SGD 1.1 million.
Here are some scam scenarios that have been reported in Singapore:
Beware of Phoney Helpers
After an accident, you may encounter people offering "help." Be cautious, as gangs operating in Singapore have been reported to pounce when they spot an accident. These touters take advantage of the stress and confusion surrounding accidents and apply significant pressure on victims to comply with their demands. Fraudsters may convince victims to use certain repair workshops or tow-truck operators that overcharge, allowing them to collect hefty referral fees. Instead, call your insurer's hotline for a tow truck and advice on accident processing. Do not send your damaged vehicle to an unauthorised repair workshop.
In staged accidents, a motorist might suddenly swerve in front of you and slam on their brakes, causing you to collide with their vehicle. They will then accuse you of causing the collision. Often, these cars are filled with passengers, all claiming to be seriously injured with neck and back injuries. The culprits proceed to make substantial collision and injury claims.
Be suspicious when a convenient witness appears on the scene and corroborates the other driver's account. This strongly suggests a staged accident, with the witness in cahoots with the driver involved in the collision.
Unwitting targets of these scam accidents may feel helpless to do anything other than comply. Victims may also believe that their insurance company will pay out, limiting their financial loss. However, making a claim under these circumstances may affect your No Claim Discount (NCD) and lead to an increase in your car insurance premium on renewal. Depending on the type of accident and the terms of your policy, you may also be responsible for a hefty excess payment.
Ways to Protect Yourself
Here are some steps you can take to protect yourself from car insurance fraud:
Install a Dashboard Camera
In a staged accident, a group of people may falsely accuse you of causing a collision. Scammers can take advantage of the stress and confusion surrounding the events and apply significant pressure to make the victim comply with their demands. It's important to keep a cool head and document the accident. Installing a dashcam provides real-time video evidence of the accident, which can be invaluable in proving your case to insurers, the police, or legal authorities. It can also assist in claiming from the other party's insurance company, preventing your insurance premium from rising due to a claim. Read our comprehensive guide to dashcams here.
Report the Accident Quickly
Before contacting anyone else, report the accident to the police and your insurer. Reporting promptly allows you to control the flow of information, ensuring that the accident details are recorded fairly and in a timely manner. Even if you believe you may have caused the accident, there is no harm in reporting it. Your insurance premium may rise regardless of whose fault it was but reporting early and submitting accident details is a wise step and may help your insurer identify and challenge exaggerated, or fraudulent claims made by the other party.
Additionally, the General Insurance Association (GIA) has provided a handy three-step checklist to follow after a car accident:
Step 1: Exchange particulars of parties involved in the accident and take note of the vehicle numbers. Take photos of the accident scene and damages to all vehicles.
Step 2: Call your insurer's hotline for a tow truck or further advice on the accident.
Step 3: Report the accident to your insurer within 24 hours or by the next working day.
Remember that you need to report an accident to the police if someone is injured or dies, if a hit-and-run occurs, or if a government vehicle/property, foreign vehicle, or pedestrian/cyclist is involved.
Use Your Insurer's Authorised Workshop
After an accident, avoid using towing services or workshops recommended by strangers, especially immediately after the incident. Scammers may lure victims into using overcharging tow-trucks or repair workshops and earn referral fees.
Report any actual or suspected insurance fraud cases to your insurance company or to the General Insurance Association of Singapore (GIA) online.
Do note, the GIA runs a GIFT reward scheme (GIA Insurance Fraud Tip-Off), offering individuals up to S$10,000 for reporting insurance fraud that leads to successful prosecution and conviction of offenders. At Budget Direct Insurance, we're dedicated to providing straightforward, cost-effective cover for your car. We're here to help you get back to normal quickly, no matter who is at fault. Find out how to make a car insurance claim here.