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Top 10 Common Tactics How to Spot Motor Insurance Fraud
The General Insurance Association of Singapore (GIA) has introduced a reward scheme to help stamp out insurance fraud.
The GIA Insurance Fraud Tip-off (Gift) scheme pays individuals up to $10,000 for reporting insurance fraud cases that lead to successful prosecution and conviction of offenders.
The most common insurance fraud cases in Singapore are from the motor, travel and personal accident insurance segments.
Common cases of motor insurance fraud in Singapore
Motor insurance fraud involves conspiring to make false or exaggerated claims involving property damage or personal injuries following an accident. Some common examples include staged accidents where fraudsters deliberately “arrange” for accidents to occur; the use of phantom passengers where people who were not even at the scene of the accident claim to have suffered grievous injury, and make false personal injury claims where personal injuries are grossly exaggerated.
Motorists are being encouraged to play a more proactive role in tackling this problem together so that insurance in Singapore remains affordable. Firstly, let’s look at some of the ways you might be able to spot a trickster.
Top 10 Common Tactics - How to Spot Motor Insurance Fraud
1. Swoop and squat
The swoop and squat con is a common tactic used by fraudsters. A motorist will swerve in front of you and jam on their brakes, causing you to crash into the back of their vehicle.
The cars can often be filled with passengers all claiming to be seriously hurt with neck and back injuries. The culprits go ahead and make large collision and injury claims.
2. Intersection collisions
Be careful when driving along the inside lane of a dual left-turn lane intersection. Opportunist conmen will deliberately ram into you if you drift into the outer lane while turning.
"Jump-ins" are people who suddenly appear and jump into other cars, claiming they were passengers. You should also be suspicious if the other driver and passengers say they're injured, despite minor damage to the vehicles.
4. Pressure to go to certain clinics
"Runners" and "cappers" are tricksters who show up at the accident scene and urge you to go to clinics that are actually fraudulent. Some criminal rings also send people to real accidents to persuade victims to go to their crooked medical professionals where they can make bogus medical claims. So be aware.
5. Overinflated medical claims
Whiplash and phantom pain are especially hard to detect on an X-ray, so scammers may work with and pay off shady doctors, chiropractors and physical therapists to corroborate their injury reports, so as to get a payout from insurance companies.
Make sure you file a police report, even for a minor accident. If the official record notes just a scratch or minor damage, it'll be less likely an insurance company will believe the other driver suffered significant injuries.
6. Phoney witnesses
Be suspicious when a witness conveniently appears and backs up everything the other driver says.
7. Tow trucks and repair workshop frauds
Sometimes, scammers are known to lure unsuspecting victims to certain repair workshops or tow-truck operators that overcharge so that they can collect referral fees behind your back.
You should always resist using tow-services or workshops that are "recommended" by other people involved in the accident.
Instead, you should call your insurer's hotline for a tow truck and further advice on how to proceed with the accident processing. Unless the accident is so minor that you can take care of the cost with S$50 to S$100 in cash, you are going to need your insurance company's help whether you are at fault or not. Not only that, relying on your insurer's authorised workshop can also be a great way to both save on your insurance premium and get an honest repair service, as insurers themselves are incentivised to minimise the cost that could result from subpar repairs and further damages to your car.
NOTE: Under the GIA Motor Claims Framework, you are strongly advised to always report all accidents to your insurer even if you have made a private settlement. This is for recording purposes because you cannot be fully certain that the other party will not file a claim against you later. By not reporting the accident, your claim may be prejudiced or declined later by insurers.
8. Workshops that inflate charges. A workshop mechanic may talk about offering reasonable repair estimates, but final bills turn out to be far beyond the estimates. Or a mechanic may leave the estimated amount blank when you sign a repair authorisation, then secretly fill in an inflated amount.
9. Needless repairs. A shop may pad bills by “repairing” mechanical problems and damages that don’t exist.
10. Counterfeit or used parts. Some dishonest shops install parts that are counterfeit, substandard or used, but charge you for expensive new parts.
Call the Singapore Police Force as soon as you get in an accident
Unless you are willing to resolve your accident damages with cash, meaning it was nothing but a very minor scratch that can be resolved with under S$100, the first thing you should always do after getting in a car accident is to call an authority. By calling the police and your insurance company, you can make sure that everything will be reported on a fair basis, and that you will be protected from any unreasonable pressure to fall victim to a scam.
Even if you actually caused an accident, there's not much downside to calling the authority since your insurance premium will rise regardless, and at least you can protect yourself from emotional responses from other people. When either the police or the insurance company's authorities arrive, scammers will be more likely to leave you alone.
Benefits of an in-vehicle camera
In-vehicle cameras can act as 'witnesses' in case of disputes in motor accident claims.
In the event of an accident, video recordings often provide clear and objective evidence of circumstances leading to the accident, and can assist insurers to understand how the accident took place. In many cases, the settlement of insurance claims can be expedited when liability can be clearly determined from the recording. Furthermore, claims costs are likely to be minimised without the need for a lengthy investigation.
More importantly, with timely and accurate information plus a recording of the event, the opportunity for filing exaggerated and fraudulent claims is also minimised. Vehicle owners are therefore strongly encouraged to install in-vehicle cameras.
Don’t get enticed by crooks
Motorists are advised not to inadvertently be enticed by the “promise” of monetary rewards by participating in such fraudulent motor accident claims. Insurance companies will strenuously investigate any suspicious motor accident claims and will not hesitate to escalate the matter to the Police.
How do you take part in the GIA insurance Fraud Tip-off (GIFT) scheme?
Members of the public who have been approached to participate in insurance fraud, such as by making false or inflated claims, or have first-hand information and relevant and specific evidence about others carrying out insurance fraud can submit reports online at: https://gia.org.sg/consumers/contact-us.html.
If you suspect the other party’s claim to be dubious or inflated but don’t want to take part in the GIFT scheme what should you do?
If you don’t want to take part in the GIFT scheme for reasons such as not wanting to provide your personal details and have them made public in court for instance, you should alert your insurer promptly. Be prepared to provide your insurer with supporting information and details that may corroborate your suspicion.
Your insurer will look at the available evidence and decide if the claim can be contested. If it believes you are not at fault in the accident, it will challenge the claim.
Otherwise, you can report possible cases of insurance fraud (such as spurious claims) online at https://gia.org.sg/consumers/contact-us.html.
Wherever you go, whatever you do, it’s vital to have good car, motorcycle and travel insurance cover.
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Updates: As of 1 October 2020, the GIA hotline for reporting possible cases of insurance fraud has been deactivated.