Report: NYC tops in staged accidents

Do you ever feel as if every other driver on the road is out to get you? Well, especially in New York City, some of them are.

A new report from an insurance industry-funded group said that New York City is the nation's capital for staged accidents, whose purpose is to cheat insurance companies - and ultimately you - out of uncalculated millions of dollars in fake medical claims and vehicle repairs.

In a typical staged accident, an honest driver is maneuvered by scammers working in organized rings into a crash that appears to be the honest person's fault, according to the report issued by the National Insurance Crime Bureau. One of the most common, known as "swoop and squat," involves the use of three vehicles driven by scammers to lure a victim into rear-ending one of the scammer cars.

Scammers then file fake and inflated claims, especially for injuries under no-fault insurance laws, often with the cooperation of unscrupulous doctors willing to perform or at least sign off on unnecessary treatments, and body shops willing to inflate repair bills.

The bureau said that claims from what are suspected to be staged accidents are rising and that New York had the most of any city in 2007, 2008 and last year - a suspected total of 1,304. That number places the entire state second after Florida, which reported 1,680 claims in those three years. Figures specifically for Long Island aren't available.

As a percentage of all claims, the numbers of suspected phony ones are small. But the claims from suspected staged accidents tend to be much higher than legitimate ones, said Tom Lohmann, who is in charge of New York operations for the bureau.

"There's an astronomical difference, and that's where the problem lies," he said.

And the suspected phony claims are increasing - up by 46 percent nationally from 2007 to 2009, to 4,802 last year - at a time when legitimate claims are decreasing.

Further increasing the cost to insurance companies, scamsters often have several passengers aboard who claim injuries. Sometimes, investigators said, "victims" materialize seemingly from thin air, claiming to have been passengers, and "witnesses" working with the scammers are stationed nearby to help "document" that the victim was at fault.

Frank Gallagher, a supervisory special agent with the bureau and also a member of the Suffolk County district attorney office's insurance frauds bureau, said scammers often target the elderly and people who appear distracted behind the wheel - chatting on a cell phone or eating, for example.

It's a costly problem, insurers said, one of many that comprise the broad category of property and casualty insurance fraud, which the industry estimates totals $30 billion a year - costs ultimately passed along in the form of higher rates.The insurance crime bureau recently produced a series of short videos demonstrating the most common techniques to snare the unwary.