Fraudulent Collision Claims in the Aftermath of COVID-19
May 11, 2020
May 11, 2020
Experience has taught us that significant economic recession or industry policy changes can have a direct effect on the number of fraudulent collision claims. For example, we saw a surge of fraudulent collision claims in the aftermath of the 2008 recession and in response to insurance industry reforms in 2010, attributed to fraud rings. In 2014, some estimates put the cost of fraudulent claims as high as $1.6 billion.
With the effects of COVID-19 expected to reach record levels and lead to unprecedented economic fallout, there is little doubt that the insurance industry will see a surge in fraudulent claims. The imposed lockdown on the economy and mandatory social distancing, while effective and necessary to combat the virus, has already led to job losses and public disenfranchisement. This may result in some folks resorting to desperate measures in an attempt to regain what they’ve lost, leading to opportunistic fraud, and others to take advantage of the system by more nefarious means, such as staged collisions or through the resurgence of fraud rings. We may very well see a surge in potentially fraudulent cases exceed what the industry currently experiences.
In any event, just as society has taken steps to prepare for the COVID-19 virus and has embraced efforts to ‘flatten the curve,’ so too must the insurance and legal industries prepare for the looming threat of fraudulent claims. As an expert, it is therefore imperative to maximize the use of the latest tools available to be able to differentiate between fraudulent claims and legitimate ones. Using specialized expertise, experience, and technology will be key in discerning fact from fiction. Hiring the right expert will prove invaluable in determining the nature of the incident while maintaining objectivity and fairness to ensure that would-be fraudsters do not take advantage of the system.
As collision reconstruction experts, we consult our clients on a wide variety of collision scenarios. Pedestrian impacts, low-speed rear-enders, intersection collisions, and centerline crossings make up just a portion of the types of collision scenarios we investigate. Such investigations typically focus on liability and who is at fault for the collision, and the collision itself is generally accepted as a fact.
One of the more contentious types of investigations we undertake are those relating to suspected fraudulent collision claims. In these cases, we are tasked to determine if a collision occurred as reported, if at all. In other words, the claim is suspected as potentially disingenuous, and therefore, open to denial. Denied claims of this type can be challenged in courtroom settings; surely, nobody wants to be labelled as a ‘fraudster,’ whether this be true or false.
Suspected fraudulent investigations require an additional level of expertise and experience as they can differ from traditional forms of collision reconstruction. When trying to identify the nature of a vehicle’s interaction with other vehicles or objects, attention to detail is of utmost importance.
Having investigated hundreds of suspected fraudulent collisions, we have identified several possible incident types, each with their own unique characteristics. These incident types are listed below:
The role of the expert is to dispassionately opine on the causes of vehicle damage and the physical circumstances surrounding an incident. The validity of the reported circumstances is tested against the physical evidence. In this sense, experts should not formulate opinions regarding intent; that should be left for the triers of fact to decide.
Fortunately, there are several methods that can be used to identify the validity of such reported claims, ranging from traditional collision reconstruction techniques to using the latest technologies, examples of which are described below:
Two technologies lend themselves particularly well to investigating suspected fraudulent claims, and both methods have been developed to access data recorded by vehicles.
The first of these technologies, the Bosch Crash Data Retrieval system, accesses a vehicle’s event data recorder or ‘EDR’ (also known as a ‘black box,’ as seen in Figure 1). EDR’s have been integrated into vehicles since the 1990s but have pervaded the automotive industry only in recent years. These devices are a secondary function of a vehicle’s airbag control module (responsible for deploying airbags, when necessary). When a collision occurs, a snippet of vehicle- and impact-related data is captured and recorded by the EDR, including parameters such as speed and brake application in the moments before. While this information can be volatile or stored permanently, it can provide investigators with valuable information to aid in reconstructing collision circumstances.
The second technology, the Berla iVe system, is a more recent technological advancement compared to the EDR. This system was initially developed to retrieve data from stand-alone GPS units, but has since been rejigged and repurposed to access information from vehicle ‘infotainment’ systems (Figure 2). Infotainment systems are now common in the automotive industry and are expected by modern day consumers to be present even in the base models of passenger vehicles. These systems act as a central hub for various vehicle controls, information, and entertainment, hence the name.
Unbeknownst to most people, infotainment systems record a variety of vehicle data as well as personal data that is almost always permanently recorded to memory. In a sense, your vehicle ‘knows’ a lot about you. Of particular interest, date-stamped GPS data can be captured, which can provide insight into where a vehicle is on a given date and time.
Once a mobile device or media player is connected to an equipped vehicle, other data can be automatically uploaded and stored, including contact logs and media playlists. Infotainment systems can also automatically store call logs, test messages, and media (such as videos).
Pro-tip: Be mindful about connecting your mobile device next time you rent a vehicle; your personal data is likely to be uploaded to the vehicle’s infotainment system and left for others to discover.
 Harris, C. (September 30, 2012). “Target Fraud.” Canadian Underwriter. Retrieved from https://www.canadianunderwriter.ca/features/cc-target-fraud/
 Image retrieved from https://www.cnet.com/roadshow/news/car-infotainment-system-automotive-tech-guide/