The New York State Department of Motor Vehicles (DMV) has issued a warning that cases of staged car crashes orchestrated by fraudsters are on the rise, leading to an increase in driver’s insurance premiums.
According to DMV data, the number of staged car crashes in New York State in 2023 increased by 34% compared to 2021 and rose by 14% from 2022. These fraudulent activities result in ordinary drivers paying an additional $100 to $300 in insurance premiums annually, causing financial strain.
One common tactic used in these scams, as stated by DMV, is sudden braking by the fraudsters driving vehicles with passengers, causing rear-end collisions. After the accident, accomplices within the fraud ring, often doctors or lawyers in collusion with the fraudsters, quickly step in to handle medical claims and legal proceedings, extracting hefty compensation payouts.
The New York State Department of Financial Services (DFS) has highlighted that these staged car crash cases not only lead to significant losses for insurance companies but also contribute to a general increase in insurance premiums statewide. DMV data shows that in 2023, there were a total of 1,729 reported cases in New York State, with 40% of accidents involving rear-end collisions, often due to inadequate following distance.
In an effort to help drivers reduce their vulnerability to such schemes, the New York State Thruway Authority offers safe driving recommendations, emphasizing the importance of following the “three-second rule” to maintain a safe distance of at least three seconds from the vehicle in front.
In addition to maintaining a safe following distance, DMV urges all drivers to adopt defensive driving strategies, strongly advising against speeding, using turn signals when changing lanes, driving attentively, and avoiding phone use. In the event of an accident, drivers should promptly document the damage to their vehicles, record the accident scene, and obtain the other driver’s license and insurance information.
To combat the increasing prevalence of fraudulent car crash schemes, DMV and the Department of Financial Services recommend the following preventive measures:
1. Never pay cash: At the accident scene, avoid settling privately with the other party for cash and instead follow standard insurance claim procedures.
2. Reject unfamiliar tow trucks: If unsolicited tow truck drivers offer their services, be cautious as they may be associated with the fraud ring. It is advisable to contact your insurance company or official roadside assistance services.
3. Beware of suspicious doctors and lawyers: Do not accept referrals to doctors or lawyers recommended by the other driver, as they may be accomplices in the fraud scheme.
4. Report fraud: All accidents should be immediately reported to the authorities, and suspicious incidents should be reported to insurance companies and the DMV.
Furthermore, DMV encourages drivers to participate in officially recognized defensive driving courses, which not only help improve driving skills but can also lead to reduced license points and a potential 10% decrease in insurance premiums.