Car Insurance

Afraid of Getting Dragged into a Car Insurance Fraud? Take These 3 Precautions

Follow our advice to help protect you from car insurance fraud.

Lately, there has been a notable increase in news about motor insurance frauds in Singapore. In fact, the number of reported cases of car insurance frauds in the first 9 months of 2017 has already doubled the total number of cases reported in 2016. Mostly, these frauds operate by staging an accident, coercing others to make claims on their insurance, and collecting those payouts under the pretense of personal injury or car repair.

The fact that most of these scams involve large-scale syndicates means that victims can often feel helplessly pressured into complying to their "requests" in fear. Since the payouts are ultimately being paid by the insurance companies, those victims may initially think that their financial loss is limited. However, if you are scammed into making a claim on your insurance, it can definitely hurt you in form of higher car insurance premiums for the foreseeable future. Here, we discuss 3 simple steps you can take to avoid falling victims to a car insurance fraud.

Install a dashboard camera

The first rule of car insurance is that the party at fault is responsible for paying the necessary costs for the required repairs and medical treatments that resulted from the accident. The problem in an insurance fraud, however, is that a group of people that staged the accident can accuse others of having caused the crash. After having gone through an accident, it can be surprisingly easy to fall victim to these kind of scams because of either confusion or peer pressure. You could try taking photos of the scene, but evidence can be tampered with, especially when the accident is being orchestrated by a group of people. Besides, when everyone around is accusing you, it can be difficult to make a persuasive case without visual evidence that you are not at-fault.

If you have a dashboard camera, however, you can provide a video recording of the accident from start to finish to help to prove your case to your insurance company and any legal authorities. It could also help to get the other party's insurer to agree to compensate you for your losses and keep your premium from rising as a result of the accident. In such a situation, having a dashboard camera installed could save you a lot of money.

Call the police as soon as you get in an accident

Unless you are willing to resolve your accident damages with cash, meaning it was nothing but a very minor scratch that can be resolved with under S$100, the first thing you should always do after getting in a car accident is to call an authority. By calling the police and your insurance company, you can make sure that everything will be reported on a fair basis, and that you will be protected from any unreasonable pressure to fall victim of a scam.

Even if you actually caused an accident, there's not much downside to calling the authority since your insurance premium will rise regardless, and at least you can protect yourself from emotional responses from other people. To take this further, some insurance plans actually offer a great accident response teams, like NTUC Income's Orange Force, that can take care of all the after-accident processes for you. When either the police or the insurance company's authorities arrive, scammer will probably be more likely to leave you alone.

Rely on your insurer’s approved workshop

Even if you were to skip the first two steps we discuss here, you should always resist using the tow-service or workshop that are "recommended" by other people involved in the accident. Sometimes, scammers are known to lure unexpecting victims to certain repair workshops or tow-truck operators that overcharge so that they can collect referrals fees behind your back.

Instead, you should always call your insurer's hotline for a tow truck and further advice on how to proceed with the accident processing. Unless the accident is so minor that you can take care of the cost with S$50 to S$100 in cash, you are going to need your insurance company's help whether you are at fault or not. Not only that, relying on your insurer's authorised workshop can also be a great way to both save on your insurance premium and getting an honest repair service, as insurers themselves are incentivised to minimise the cost that could result from subpar repairs and further damages on your car.

If you already got scammed...

We hope that our 3 tips above are both easy to execute and actually helpful in minimising victims of car insurance frauds in Singapore. If you've already fallen victim to such a scam, however, you are not entirely hopeless. GIA has launched a hotline (1800–44–37283 or GI-FRAUD) where people can report these cases for investigation. Insurers themselves are also very motivated to detect and investigate these cases, as insurance frauds are literally costing them a hundred million dollars a year. If you believe you are paying a higher car insurance premium because you felt victim a scam, helping catch those scammers could help you make an appeal to your insurance company and rectify this unfair situation.

Duckju Kang

Duckju (DJ) is the founder and CEO of ValueChampion. He covers the financial services industry, consumer finance products, budgeting and investing. He previously worked at hedge funds such as Tiger Asia and Cadian Capital. He graduated from Yale University with a Bachelor of Arts degree in Economics with honors, Magna Cum Laude. His work has been featured on major international media such as CNBC, Bloomberg, CNN, the Straits Times, Today and more.

{"endpoint":"\/newsletter\/subscribe","style":"blue","title":"Keep up with our news and analysis.","version":"sidebar"}