Many a time, blame is put to people who are victims of staged accidents - that which came to be because of another's actions which are done on purpose.
This tactic is known as 'swoop and squat' in the auto insurance industry.
The car, which suddenly cuts or swoops into the lane, is called the swoop car while the car, which is hit, is called the squat car.
In this situation, these two cars are actually working together to cause a collision.
Their sole purpose is to make it seem like the other's fault.
The scammer loads up the squat car in order to file numerous medical claims against the other's insurance.
A variation of this scenario is called a 'panic stop.
' In this situation, the car planning to be hit is full of passengers.
And it will pull into a lane in front of you while one of the passengers is asked for to create distraction.
As you are driving behind the vehicle, all it takes is a moment distract yourself in your car while changing the stereo channel, answering the phone, or talking to your passenger.
Through these, the driver of the swoop car will slam on the brakes, causing you to make a full stop.
Every passenger of the swoop car will pretend to have injuries of varying degrees.
And then as soon as the traffic police will arrive and investigate, you become the instant victim of car insurance fraud.
But if you have good auto insurance coverage, you may not have to pay for anything out of your pocket, either to repair the other vehicle or to cover any medical expenses.
Most of the time, the scammers get vehicle repair estimates but repair for the car never happens.
Moreover, they also file phony medical bills for treatments, which never took place.
Even if you are fully covered and your insurance company takes care of everything, you still have to pay for this fraud in the form of increased premiums.
But you are not alone as the auto insurance industry is very much aware about the fraud.
A car insurance company always follows a file claim by an investigation.
However, scammers are so good at perpetrating this type of fraud; it is difficult to track them.
The auto insurance industry pays out billions of dollars each year due to indemnity fraud.
The only way to recover these financial losses by the companies is to increase premiums across the board.
While you pay the bill for all the damage that you did not purposely cause, they take care of the processes, and yet you are still the victim of indemnity fraud.