Uptick in fraudulent parking lot accident claims

New rules are in place and in effect for Oregon motorists that govern distracted driving.
New rules are in place and in effect for Oregon motorists that govern distracted driving.

 

We’ve all been there – packed parking lots filled to the brim with vehicles, whether at train stations, airports, concert halls or shopping centers. With so many people vying for a spot, it’s a wonder that car accident in lots don’t happen more often.

In actuality, parking lot crashes are more common than you might think. However, at the same time, an increasing number of claims filed by policyholders are actually fraudulent, according to the National Insurance Crime Bureau.

“NICB reviews an average of 120,000 claims annually.”

Appropriately titled, the claims are called “hit-while parked,” understandably so because they occur when a motorist has left his or her car, only to be struck while away. Most insurers cover these types of incidents and more people are telling their providers that such an incident happened to them when it really didn’t, warned John Antillon, NICB special agent. Speaking to Claims Journal, Antillon noted that of the 120,000 claims reported to NICB annually, a “large percentage” are related to parked-car incidents.

“The vast majority of those claims are legitimate claims and are needing assistance from their insurance company,” Antillon explained. “But there are also claims that come through that have red flag indicators that there could potentially be some questionable activity.”

50,000 car accidents in lots annually
Although motorists traditionally are moving at a slow rate of speed in parking lots, accidents happen. Based upon estimates from the National Safety Council, around 50,000 crashes transpire in these locations annually, CBS News reported.

NSC president Deborah Hersman attributes many of these incidents to motorists multitasking.

“It’s just as dangerous to be distracted in a parking lot going 5 miles per hours as it is going 50 mph,” Hersman explained.

Street sign that depicts anti-fraud. Insurers are trying to stamp out fraud, but they need policyholders’ help.

Common red flags suggestive of fraud
Given that these situations can and do happen, Antillon noted, insurance fraudsters are trying to bilk the system, but they often leave behind clues that are indicative of deception. One of the tell-tale signs is making a claim days or weeks after the alleged incident occurred.

“So, the insured will contact the adjuster…days or a week after the reported date of loss and it also coincides with, maybe, the policy had lapsed and then it was reinstated shortly before the reported loss was filed,” Antillon told ClaimsJournal.

Other red flags are more independent to the person making the claim, such as if similarly questionable filings were made previously. Antillon also noted insurance adjusters will also be suspicious if a damaged vehicle is parked somewhere different from where the incident actually occurred, or dents and dings are on a part of the car that wasn’t mentioned when the claim first came in.

Unfortunately, insurance fraud – parked car or otherwise – is happening more often in recent years. In its State of Insurance Fraud Technology report, issued in 2016, the Coalition Against Insurance Fraud noted 60 percent of insurers acknowledge the crime has risen since 2012.

James Ruotolo, director of product management at SAS, an analytics company, said insurers are getting better at detecting fraud by implementing automated technologies that specialize in this very thing. But this also entails additional hiring and training, which costs money. It’s estimated that 75 percent of insurers have implemented automated fraud detection technology, up sharply from previous analyses that CAIF performs on a biennial basis, meaning once every two years.

As to what other red flags are often indicative of fraud, damaged tires and airbags deploying tend to suggest vehicles were in motion, according to Antillon.

When policyholders manufacture claims out of whole cloth, everyone winds up paying, usually in the form of higher insurance premiums. To learn more about how you can prevent fraud and report incidents that seem sketchy, visit NICB’s website or reach out to us here at PayneWest Insurance.