According to a 2022 study by the Coalition Against Insurance Fraud (CAIF), auto theft insurance fraud costs U.S. Consumers $7.4 billion annually. Maryland Auto is committed to fighting fraud by implementing measures to ensure that payments are made only on legitimate claims. When fraud is suspected, claims are sent to our Special Investigations Unit (SIU) for further examination.
We recently received a claim that involved a seemingly straightforward crash between two luxury sedans. Maryland Auto’s policyholder reported that the claimant’s vehicle had crossed the center lane and struck their car head-on at 3:00 PM. However, a closer examination of the evidence revealed a more sinister plot.
The Baltimore City police report indicated the crash occurred at 4:24 PM, nearly an hour and a half later than the initial report from the policyholder. Additionally, the 911 call was placed at 4:25 PM, further corroborating the later timeline.
Both vehicles sustained significant front-end damage and airbag deployment. They were towed from the scene by a private towing company to a salvage yard.
There were four passengers in the insured vehicle, all of whom were represented by an out-of-state attorney. The passengers each claimed injuries and were being treated at a chiropractic facility. There were no reported passengers in the claimant’s car.
When investigating the claim, the SIU Investigator contacted the owner of the claimant vehicle who was listed as the owner and driver on the police report. The person listed as the driver and owner confirmed that he previously owned the vehicle but claimed that he had sold the car to a tow company with a junkyard the month before the accident because the engine had blown. He denied involvement in the crash.
The SIU investigator also reviewed body-worn camera footage from the Baltimore City Police, which showed the insured car attached to a tow truck. There was no evidence of any debris or fluid in the roadway or on the tow truck, indicating the crash did not happen at that location.
The footage also showed a man who was not involved in the accident. Further investigation revealed that this person is known to be involved in multiple questionable staged “accidents.”
The SIU investigator learned that each of the passengers in the insured vehicle had a history of involvement in suspicious claims and associations with individuals known for suspected fraudulent activity, including the man seen in the body-worn camera footage.
An accident reconstructionist hired by Maryland Auto determined that while the insured and claimant vehicles were involved in a collision, the right front passenger seat of the insured car was likely unoccupied at the time of the accident. This conclusion was made because the passenger-side airbag didn’t deploy, suggesting a lack of sufficient weight in the seat to activate the sensor.
A diagnostic evaluation of the insured vehicle identified several fault codes, and despite having some battery power, the car failed to start. This suggests that it was inoperable at the time of the crash and could not have been driven to the scene.
A subsequent inspection of the claimant’s vehicle revealed multiple system issues in this car, including a few that pre-dated the incident. Despite the engine starting and transmission functioning, the parking brake remained engaged and could not be released.
The SIU investigator also found a similar claim with another insurance carrier from the month prior, where two vehicles collided head-on in the same location. The investigator reviewed the body-worn camera footage from that crash as well, and it was the same situation where the cars were already loaded onto the tow truck. The same towing company was used, and the same uninvolved man known to be connected to staged crashes was at the scene.
With this information, the SIU investigator scheduled an Examination Under Oath (EUO) with the passengers of the insured vehicle. However, the night before the arranged EUO, the attorney representing all four passengers contacted the investigator to advise of scheduling conflicts among several passengers.
Ultimately, the SIU team could only conduct EUOs with two passengers, who provided conflicting information about their seating positions in the insured vehicle. Both passengers also inaccurately stated the time of the crash as 1 PM and failed to correctly identify the other car involved.
Due to these inconsistencies, the claimant’s prior sale of the vehicle, the passengers’ involvement in other suspicious claims, and evidence suggesting the insured car was towed to the scene, the claim was denied. Maryland Auto then forwarded the case to Maryland Insurance Administration’s Insurance Fraud Unit for further investigation.
