Auto insurance scams can take many different forms, all of which can cost you a lot of money. All policyholders end up shelling out a lot of money for overpayments or improper payments associated with an insurance claim. This means that you end up spending a lot of money to satisfy someone else’s greed. By being an educated consumer, you can help minimize these scams and help keep your auto insurance premiums from skyrocketing. In this article, we will provide tips on how to avoid auto insurance referral scams and help get rid of them as well.
How do car insurance referral scams work?
An attorney can pay a tow truck driver a search fee to refer personal injury car accident victims to them. This is illegal. An attorney may be on the payroll of a health care provider to refer victims of personal injury accidents to them, and this is also illegal. An auto body shop may pay a tow truck driver a search fee to have damaged cars brought there. This is also a crime. In the insurance business, these tow truck drivers are called “hunters.” It may be illegal for a tow truck operator to refer an accident victim to a particular repair shop without being asked, and especially if he receives a search fee for making the referral.
Many auto body shops control or own “chasers”. It is up to the insurance companies to opt out of doing business with these stores. If the insurance company does not recognize the shop your car was towed to, your car may need to be taken to another auto body shop. Before this happens, you may have to pay the towing fee, storage, and perhaps other administrative fees. These fees can add up to thousands of dollars, and your auto insurance may not cover everything. If you do not wish to pay, the auto body shop can hold your vehicle in accordance with state law and charge you storage and towing fees, and place a lien on your car and sell it to recover its fees. To recoup these referral fees, lawyers, tow truck operators, doctors and hospitals, and auto body repair shops will likely inflate their bills. Ultimately, it is you, the policy holder, who ends up paying through the wazoo.
What can you do to fight auto insurance scams?
Be well informed and educated. Whether you need the services of a personal injury attorney, tow truck operator, or doctor, learn everything there is to know about your rights as an accident victim. Here are some tips:
tow truck
- Make sure the towing service has a legal license to operate before hiring their service.
- Check to see if the towing service is associated with a reputable company like Triple A (AAA) or another auto organization.
- Check to see if the towing service has a contract with local, county, or state law enforcement agencies.
- Listen for the obvious red flags. Does the driver recommend a particular repair shop without being asked? If he does, this could indicate that he has a financial interest in that repair shop.
- Be sure to read the fine print of the contract or bill of service that the tow truck driver asks you to sign.
- Ask the driver to take your car to a safe place where your auto insurance company’s insurance adjuster or adjuster can assess the damage.
- Call your auto insurance company right away for information on towing services and where to take your car for repairs.
- Consider having your car towed to a preferred body repair shop. Some auto insurance companies use preferred repair shops where they have a mutual agreement that guarantees your car will be repaired to the highest possible standards. For more information, call your auto insurance company.
Who can I call to report auto insurance fraud?
If you think you are a victim of auto insurance fraud, report the incident to your state insurance commissioner.
Lawyers
- Make sure the attorney you are referred to is licensed to practice law in your state.
- Ask them in advance what their rates are and what their payment plan is for your situation and how it will benefit you if you hire their service.
- Check with your state bar association for any complaints about them.
Health service providers
- Ask if they are licensed to practice as a health professional in your state.
- Ask how much they charge for their services and if they will accept payment from your health or auto insurance companies and not charge any fees beyond that.
- Check with the health care provider’s state licensing board to see if any complaints have been filed against them.
Today there are many forms of consumer fraud. It is up to you to educate yourself on what is and is not legitimate. Hopefully our advice will minimize your chances of becoming a victim of auto insurance referral fraud.
