Car insurance fraud remains a scourge in Singapore, but insurers are fighting back. Here are the latest car insurance scams, and what drivers can do to protect themselves.
Despite Singapore’s squeaky-clean image, car insurance scams still abound. But unlike some of the exaggerated schemes found in other countries, the scams here tend to take on a more subtle character, making them harder to spot.
Here’s a look at some common car insurance scams in Singapore, what drivers can do to protect themselves, and what is being done about it.
Common car insurance scams in Singapore
Insurance claims “specialists”
One of the most recent car insurance scams to come into the spotlight, this scam involves the sudden appearance of insurance “specialists” when you get into an accident.
They will promise to settle all your repairs and insurance claims for you, directing you to a car workshop of their choice.
After repairing your vehicle, the workshop will then send in an overinflated repair bill – sometimes padded with repairs for non-existent mechanical problems – to claim against your car insurer. You may also end up with inferior replacement parts or shoddy repair work.
This is perhaps one of the oldest tricks in the scammers’ book, and is as straightforward as it is effective.
Basically, a gang of crooks conspire to stage a traffic accident, such as by causing you to crash into the back of their vehicle. They then attempt to make exaggerated claims for medical expenses, citing serious injuries suffered in the staged accident.
Some scammers also make use of acquaintances or even family members to make false claims for injuries suffered in a car accident.
In one particularly egregious case, a man – after staging a minor accident – took his entire family to a clinic for supposed “injuries” suffered. The kicker is that none of them were riding in the vehicle at the time of the collision.
This is done in an attempt to procure a larger compensation from the victim of the scam.
Fake tow truck
If you see a tow truck magically appearing soon after you get into a collison, don’t go accepting their help just yet. They could be part of a scam syndicate, and were likely standing by to swoop in and tow your vehicle to a dubious workshop.
If you give in to their offers of “help”, and allow them to take your vehicle, you will be slapped with high towing fees and inflated repair bills from the car workshop.
Instead, stay calm and contact your insurer for emergency assistance. Only accept towing services after verifying the identity of the operator.
What’s the harm of car insurance fraud?
Some may consider car insurance fraud to be a type of “victimless” crime. The fraudsters’ claims are made against your car insurance policy, and it is your insurer that provides the compensation.
However, such scams actually make victims out of all drivers. By collecting insurance payouts on false premises, scammers increase the cost of motor insurance for all drivers. This is because insurance works on a pooled basis – the premiums paid by policyholders are pooled together and used to pay out claims.
When scammers take money from the pool using dishonest means, the available pool of funds shrinks. To ensure claims can continue to be paid out, the insurer has to raise the premiums paid by individual drivers. You can see how this can be a problem if left unchecked.
Granted, the rate of increase is likely to be small on a per-policy basis. But then again, why should we pay for dishonest behaviours by crooks and scammers too lazy to make an honest living?
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What is being done about car insurance fraud in Singapore?
Insurers are taking the fight to scammers with the help of AI.
One such example is MSIG, which has deployed TrueSight Fraud Intelligence, developed by Fermion, to more accurately assess motor insurance claims and flag instances of suspected fraud.
Up to 50% of claims can now be automatically screened, freeing up claims officers to focus on other more important tasks, such as interviewing claimants or evaluating more complex claims.
This, in turn, is expected to benefit drivers by generating cost savings that may be passed on to policyholders.
How can you protect yourself against car insurance fraud?
Install an in-vehicle camera
If you haven’t already, you should install an in-vehicle camera. This will act as a source of invaluable evidence that can help prove your innocence in case of a staged accident.
The video recordings captured by your in-vehicle camera will also help your insurer understand how an accident took place, and can help expedite the insurance claims process.
Report the accident as soon as possible
Try not to delay reporting the accident to the police and your insurer.
This will better allow you to control the narrative and ensure that the details of what actually happened are captured in a fair and timely manner.
Don’t accept offers of help from unknown parties
Getting into a traffic accident can be a stressful affair, and scammers make use of the shock, anxiety and confusion to work their schemes.
No matter how helpful or friendly they may appear, don’t accept offers of help from unknown parties. Contact your insurer for emergency help immediately, and wait for authorised representatives to arrive.
Don’t hesitate to call the police for help if the scammers get too insistent or threatening.
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