Report Car Insurance Fraud (What information do you need?)

Report car insurance fraud by (1) gathering as much info as possible, (2) using photo evidence to support your claim, and (3) being vigilant of suspicious circumstances. Reporting auto insurance fraud could mean a reward when reported to the FBI.

Free Car Insurance Comparison

 Secured with SHA-256 Encryption

Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

Full Bio →

Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jul 27, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • Car insurance fraud ends up making all car insurance rates rise
  • If you suspect fraud, there are specific steps you can take
  • You should be aware of the common fraud schemes to make sure you don’t become an unwilling participant


Car insurance fraud is something that affects all of us by raising our rates and influencing the types of coverage or insurance providers offer.

However, you and I can help make this situation better by becoming aware of what insurance fraud really is and being willing to report it when we see it.

When we do report it, there is some specific information we’ll need in order to help facilitate investigators doing their jobs.

There’s nothing fraudulent about our FREE search tool below; enter your ZIP code to see great rates on car insurance from America’s best companies!

According to the nonprofit Coalition Against Insurance Fraud (CAIF), thieves and scammers defraud insurance companies to the tune of about $80 billion annually.

If that number is too hard for you to wrap your brain around, consider the fact that if they all pooled their resources and started a company they would rank 17th on the Fortune 500 list in terms of annual income.

The CAIF doesn’t say how much of that $80 billion is car insurance fraud.

Different Types of Fraud

In order to properly report car insurance fraud, the first thing you need to know is that there are several different types. The Pennsylvania Insurance Fraud Prevention Agency lists five different categories of fraud on their website:

  • Staging accidents and filing false reports of injury
  • Filing false reports claiming vehicle theft
  • Filing false claims that include incorrect accident or coverage dates
  • Filing false claims for damage that already existed
  • Lying about who was driving a car at the time of an accident

A sixth type of fraud not mentioned by the Pennsylvania Insurance Fraud Prevention Agency may be one that is most often overlooked.

It involves claimants and repair shops agreeing to inflate the cost of repairs in order to get a bigger payout from a car insurance company. Oftentimes both parties will then split the extra money.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Filing False Claims

The idea of filing a false claim is often defended by those who are caught on the premise that insurance companies have so much money they won’t suffer just from this one case of fraud.

That may be true, but when you combine all of the false claims together, it adds up to billions of dollars.

In order for you to report a false claim, you need to know as many of the details about an accident as possible. For example, imagine reporting your neighbor for including damage to his car incurred three years ago as part of a claim filed for an accident he had yesterday.

You’ll need to know approximately when the original damage occurred, how it was sustained (to the best of your knowledge), and how it relates to the rest of the vehicle and the damage that was legitimately done in the most recent accident.

Obviously, you won’t need names, dates, and other details, but investigators need you to be as sure as possible and to provide as much information as you have.

If you have supporting evidence, such as pictures that might have been snapped during a neighborhood street party, it would be very helpful to the investigation.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Reporting Staged Accidents

You may find yourself an unwilling participant in the staging of an accident designed to defraud a car insurance company.

This is a crime that’s been taking place with increasing regularity across the country, but especially in the 12 states that have no-fault laws in place.

The Fraud Report by Trace America, LLC is a great resource for information on how to identify a staged accident and what you should do about it.

According to experts, whenever you’re in an accident that seems a little strange there are a couple of things to look for that might help you better identify whether it was staged or not. Always be aware of:

  • Cars that seemingly come out of nowhere before involving you in the crash
  • People not directly involved in the accident who appear and start giving instructions
  • Other accident participants encouraging you to file an injury claim even when you’re not hurt
  • Tow trucks that appear without ever being called
  • Accident participants demanding you use a specific lawyer or repair shop

The strategy for staging an accident involves finding a victim who appears, at first glance, to be somewhat vulnerable. You can help thwart scammers from making you their victim by projecting an image of confidence behind the wheel.

If you are in an accident, call the police immediately and never share information with the other participants until the authorities arrive.

Inflated Claims by Repair Shops

The type of car insurance fraud that involves inflated claims by repair shops is harder for customers to identify because they aren’t really sure how much a given repair should cost.

In any case, whenever you have a vehicle repaired after an accident you should request the shop owner or manager show you the documentation he uses to justify the estimate.

Garages typically have a catalog of parts and a pricing guide for labor.

The total cost of your repair should be a combination of the labor, parts, and a retail markup of those parts. If the repair cost seems unusually high, you can always go online and search around for some different numbers. It’s a good idea to get repair estimates from at least two different garages before having any work done. 

You’re looking for the average amount of time it would take to repair the damage your vehicle sustained plus what the parts would cost at the wholesale level.

If your numbers are within a couple of hundred dollars, there’s probably nothing to worry about. But if the price difference escalates into thousands of dollars, you may very well have a case of fraud on your hands.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Where to Report Fraud

Many nonprofit organizations and insurance company cooperatives’ sole purpose is to help combat insurance fraud. You can contact one of them, but a better bet is to probably contact your state insurance department.

Since insurance companies must be licensed to do business in a particular state, the state has the most muscle that can be used against the person or company committing the fraud.

If you live in the state of Texas, for example, the Department of Insurance provides a toll-free number and two website links making it extremely easy for citizens to report insurance fraud.

They also provide contact information to the state Attorney General’s office where certain types of fraud claims should be directed.

To find the appropriate channels in your state you can run a standard Internet search using a phrase similar to “your (state name) car insurance fraud.”

It’s important to note that some states require insurance companies to report suspected cases of fraud as a matter of law. Oklahoma is just one example.

Furthermore, a small handful of states like Texas even require individual consumers to report any instances where they suspect they are victims of insurance fraud within 30 days of such actions.

Even if you’re not required by law to do so in your state, reporting suspected cases of fraud helps all of us.

Insurance Fraud is No Joke

The $80 billion number we quoted earlier is clear evidence that insurance fraud is no light matter. It’s easy for us to assume that car insurance companies have money to burn so minor cases of fraud are inconsequential.

However, that thinking is both incorrect and shortsighted.

The fact is that insurance companies cannot possibly recover all of their fraudulent losses by going after those who commit the fraud to begin with. That means they have to spread those losses out among all of us.

Furthermore, contrary to what many Americans believe insurance companies are not awash in cash every day of the week. They actually make their money by investing the premiums you and I pay into the system.

The return on those investments helps them cover claims made by customers and still put some profit in the bank.

When an insurance company pays out millions of dollars in fraudulent claims, they have less cash to invest; less cash to invest means higher premiums for you and me.

You can protect yourself from engaging in fraud through ignorance by:

  • making sure your policies are up-to-date
  • knowing exactly what your policy does and does not cover
  • being honest with your insurance company when reporting an accident
  • keeping accurate records regarding your policies, your premiums, and any claims you might make

If you’re worried about reporting a suspected case of fraud out of fear of retribution, rest assured that state laws are in place to protect you from such things.

That’s not to say that a guilty party won’t try to harass you, but if that happens the full force of the law can be levied against the individual.

For your protection, some states even allow anonymous reporting of fraud cases so that your identity is never known. If all of us do our part to help reduce car insurance fraud will all be better off with lower premiums.

While you’re thinking about, now is a great time to click here to enter your ZIP code into our FREE search tool to get started searching for auto insurance quotes right for your situation.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Average Monthly Car Insurance Rates by State