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Staged auto crashes are a form of insurance fraud, according...

Staged auto crashes are a form of insurance fraud, according to the state DMV, which cautioned motorists to drive defensively. Credit: Howard Schnapp

Staged car crashes are contributing to rising insurance premiums on Long Island and nationwide, the state Department of Motor Vehicles said Thursday, prompting the agency to urge drivers to take steps "to avoid falling victim" to such scams.

The number of staged auto crashes in New York grew to 1,729 in 2023 — the latest year data available — an increase of 14% over 2022 and a 34% increase over 2021, according to figures from the Insurance Information Institute cited by the DMV in its statement. The Malvern, Pennsylvania, nonprofit, which represents the insurance industry, said such crashes "inflate the average auto insurance premium" by up to $300 per year. 

Figures for Long Island aren't available.

Car insurance prices are rising for several reasons, industry officials told Newsday, including an increase in the rising cost of claims, number of serious accidents and the higher cost of repairing advanced technology in modern vehicles.

“When someone intentionally causes a crash to collect insurance money, it's called a staged crash or ‘crash for cash,’ which is a form of insurance fraud,” said Mark J.F. Schroeder, commissioner of the state DMV, in a statement.

“By practicing defensive-driving habits, such as anticipating other drivers’ actions, not tailgating, and being prepared to react quickly, New Yorkers can avoid being victims of fraud,” Schroeder said. Other experts suggest the use of dashboard cameras to have video proof of a faked crash. 

Here are five things to know about staged car crashes, including what drivers should do if they feel they’re the victim of a staged auto incident.

Staged car crashes are a “deliberate collision between vehicles” that insurance fraudsters use to file insurance claims to collect money, Loretta L. Worters, vice president of media relations at the Insurance Information Institute, said in an emailed statement.

“The goal is to defraud insurance companies and victims into paying out false claims,” Worters said.

Some criminals will position cars with existing damage so that the vehicle looks like it was in an accident, or they may intentionally damage a vehicle by ramming it against a wall, tree or another vehicle before filing a claim, Worters said. 

The Insurance Information Institute estimates that staged accidents nationwide cost auto insurers approximately $20 billion in claims annually. 

The institute estimates these incidents cost every U.S. driver $100 to $300 more in annual auto insurance premiums.

Kevin Shakil, president of Melville-based Tekbytes Insurance Brokerage, a provider of auto insurance, said fraudulent claims have increased costs for all carriers.

"That means people who are driving safely every day are seeing rates go through the roof," Shakil said.

Staged accidents are most likely to occur in urban areas with high levels of traffic, or in wealthier areas with more “high-end luxury vehicles because [fraudsters] presume there’s adequate insurance coverage,” said Robert Sinclair, senior manager of public affairs for AAA Northeast.

New York was second only to California's 5,366 staged accidents in 2023, according to the Insurance Information Institute. 

“By their very nature, Nassau and Suffolk counties are so closely tied to cars that this is an issue all Long Islanders need to be aware of and on the lookout for,” Schroeder said in an email.

The state DMV recommends drivers practice defensive-driving habits, including:

Allow space ahead of them, Avoid tailgating, , Signal before changing lanes, Anticipate driver errors,.

The department also said defensive driving courses can save money on auto insurance premiums.

Joseph Matos, director of communications for the Coalition Against Insurance Fraud, a nonprofit that works to promote anti-fraud legislation, said consumers should also consider getting dashboard cameras, which capture "insurance fraud on video and could save not only the individual being scammed time and money, it saves the insurance company time and money."

Drivers involved in a crash should “immediately call the police to an accident scene” and use their phone to record and “document damage and the number of occupants in other vehicles," Nicholas Zeitlinger, public affairs specialist with the National Insurance Crime Bureau, said in a statement.

Drivers should also “steer clear” of tow trucks that either they or law enforcement did not order, Zeitlinger said. They should also be wary and avoid individuals who appear at the scene of an accident to direct the victim to a particular doctor or attorney, he added.

With Tory N. Parrish

Staged car crashes are contributing to rising insurance premiums on Long Island and nationwide, the state Department of Motor Vehicles said Thursday, prompting the agency to urge drivers to take steps "to avoid falling victim" to such scams.

The number of staged auto crashes in New York grew to 1,729 in 2023 — the latest year data available — an increase of 14% over 2022 and a 34% increase over 2021, according to figures from the Insurance Information Institute cited by the DMV in its statement. The Malvern, Pennsylvania, nonprofit, which represents the insurance industry, said such crashes "inflate the average auto insurance premium" by up to $300 per year. 

Figures for Long Island aren't available.

Car insurance prices are rising for several reasons, industry officials told Newsday, including an increase in the rising cost of claims, number of serious accidents and the higher cost of repairing advanced technology in modern vehicles.

“When someone intentionally causes a crash to collect insurance money, it's called a staged crash or ‘crash for cash,’ which is a form of insurance fraud,” said Mark J.F. Schroeder, commissioner of the state DMV, in a statement.

“By practicing defensive-driving habits, such as anticipating other drivers’ actions, not tailgating, and being prepared to react quickly, New Yorkers can avoid being victims of fraud,” Schroeder said. Other experts suggest the use of dashboard cameras to have video proof of a faked crash. 

Here are five things to know about staged car crashes, including what drivers should do if they feel they’re the victim of a staged auto incident.

What is a staged crash?

Staged car crashes are a “deliberate collision between vehicles” that insurance fraudsters use to file insurance claims to collect money, Loretta L. Worters, vice president of media relations at the Insurance Information Institute, said in an emailed statement.

“The goal is to defraud insurance companies and victims into paying out false claims,” Worters said.

Some criminals will position cars with existing damage so that the vehicle looks like it was in an accident, or they may intentionally damage a vehicle by ramming it against a wall, tree or another vehicle before filing a claim, Worters said. 

What is the impact of staged crashes on insurance premiums?

The Insurance Information Institute estimates that staged accidents nationwide cost auto insurers approximately $20 billion in claims annually. 

The institute estimates these incidents cost every U.S. driver $100 to $300 more in annual auto insurance premiums.

Kevin Shakil, president of Melville-based Tekbytes Insurance Brokerage, a provider of auto insurance, said fraudulent claims have increased costs for all carriers.

"That means people who are driving safely every day are seeing rates go through the roof," Shakil said.

Where are staged crashes more likely to occur?

Staged accidents are most likely to occur in urban areas with high levels of traffic, or in wealthier areas with more “high-end luxury vehicles because [fraudsters] presume there’s adequate insurance coverage,” said Robert Sinclair, senior manager of public affairs for AAA Northeast.

New York was second only to California's 5,366 staged accidents in 2023, according to the Insurance Information Institute. 

“By their very nature, Nassau and Suffolk counties are so closely tied to cars that this is an issue all Long Islanders need to be aware of and on the lookout for,” Schroeder said in an email.

What steps can drivers take to avoid becoming a victim of staged crashes?

The state DMV recommends drivers practice defensive-driving habits, including:

  • Allow space ahead of them.
  • Avoid tailgating. 
  • Signal before changing lanes.
  • Anticipate driver errors.

The department also said defensive driving courses can save money on auto insurance premiums.

Joseph Matos, director of communications for the Coalition Against Insurance Fraud, a nonprofit that works to promote anti-fraud legislation, said consumers should also consider getting dashboard cameras, which capture "insurance fraud on video and could save not only the individual being scammed time and money, it saves the insurance company time and money."

What to do if you believe you might be a victim?

Drivers involved in a crash should “immediately call the police to an accident scene” and use their phone to record and “document damage and the number of occupants in other vehicles," Nicholas Zeitlinger, public affairs specialist with the National Insurance Crime Bureau, said in a statement.

Drivers should also “steer clear” of tow trucks that either they or law enforcement did not order, Zeitlinger said. They should also be wary and avoid individuals who appear at the scene of an accident to direct the victim to a particular doctor or attorney, he added.

With Tory N. Parrish

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