Cedric Stephens, Insurance HELPLINE
Founder and chairman of Insurance Company of the West Indies, Dennis Lalor, in a speech to members of the Rotary Club of Kingston on April 24, 2008, spoke about insurance fraud as "a danger that was lurking in the background".
It was, he said, having "a profound effect" on the balance sheets of insurance companies and honest customers.
He estimated the scale of the problem, based on 2007 statistics, to be in the order of J$3 billion or about 35 per cent of all claims. Cash for crash and exaggerated whiplash injuries for low velocity accidents were, he said, worrying aspects of the developing trend.
Jerome Reynolds, a Gleaner staff reporter, in an article published on August 19, 2013, wrote that "detectives were probing a major insurance scam involving doctors and lawyers" and that "more than J$800 million has been swindled from insurance companies through the scheme".
The article also said that the Insurance Association of Jamaica "lamented that the collusion between some doctors and lawyers to defraud insurance companies is costing billions of dollars and threatening the viability of the sector".
Today's column is written against the background of these two sources of information. I received an unsolicited email with nine photographs from a source - call him Michael - as well as additional details about a series of events during three long telephone calls.
Michael, who lives outside of Kingston, stated that his motive for sharing his story was because it was of public interest. He wanted others to know about insurance fraud, how it was aided and abetted by some organs of the State and the direct financial impact that it can have on consumers.
Michael's real name, address, the scene of the accident, the names of the insurers and the third party and other details that can link him or his vehicle to the actual accident that took place last year have been removed from his description of the events.
He also alleges that he and employees of the insurance company have received threats. I have been unable verify Michael's statements but I believe that it is most important that I protect his identity.
Michael's edited comments: "At approximately 4:10 p.m. on May 16, 2012, I left work and was on my way to attend a teacher's day function. I was travelling along a main road. On reaching the vicinity of my intended turn off, I positioned my vehicle to make a right turn. A motor vehicle travelling in the opposite direction slowed down and flashed its headlamps which interpreted as a signal for me to make the turn. When my vehicle was in the process of turning the other vehicle hit the left rear door of my car.
"The police were called. When they came to the scene, they said that they could not say whether or not I was at fault. There was no indication of any personal injuries. Photographs of the vehicles were taken by one of my friends who also came on the scene. The other driver did not leave his vehicle.
"A few days later, I made a report to my insurers and provided them with copies of the photographs. I learnt afterwards that the third party was alleging that I caused the collision and submitted a claim of J$900,000 to fix his vehicle.
"When the estimate of repair was examined and compared with the photographs that I had submitted, it was found that it was not the same vehicle that had collided with mine. When confronted with the evidence, the third party confessed that he had exaggerated his claim.
"I also learnt that the company has since settled three claims from alleged passengers for personal injuries amounting to over J$1 million. As a result, my premium has increased from J$35,000 to over J$70,000."
Helpline's response: You and the insurance company were the victims of a T-bone accident scam. I learnt this when I entered 'what is a staged accident?' in Google.
The site http://www.dmv.org/ insurance/how-to-handle-staged-car-accidents.php provides tips in dealing with staged accidents. It says "staged car accidents are becoming more common throughout the United States for the intent of pocketing money from auto insurance fraud in the form of false car-insurance claims."
Even more interesting, the article describes three of the most common staged accident scenarios as follows:
1. The T-Bone: This occurs when a scam artist will wait for your car to proceed through an intersection and then jam the gas pedal and T-bone your vehicle. When the police arrive, phony witnesses will then claim you were the one who ran the stop sign or traffic signal. Based on the information that you provided, this is what I believe happened to you.
2. The Wave: This occurs in heavy traffic. When the scam artist notices you're attempting to switch lanes, he or she will wave you ahead. But then as you attempt to manoeuvre into the lane, the scam artist will gun the gas, causing a collision with your car. When the police arrive he or she will deny ever providing a courtesy wave, placing you at fault.
3. Swoop and Stop: In this scenario, a car will suddenly pull in front of yours and stop or squat. Another vehicle, will simultaneously pull up alongside your car, preventing you from a preventive swerve.
The passengers in the car that stopped will then, in collaboration with a shady physician or chiropractor, file personal injury claims for phony injuries. Or some will go to actual doctors, claiming whiplash or some other 'soft tissue injury', which are difficult to detect.
In my next article, I will explain what steps drivers can take to combat insurance fraudsters.
Cedric E. Stephens provides independent information and free advice about the management of risks and firstname.lastname@example.orgSMS/text message to 812-7233