Protect Yourself From the Staged Accident Underworld

Unfortunately, people are injured and sometimes killed every day in automobile accidents. But at the same time American culture has been infiltrated by a group of accident racketeers who take advantage of innocent motorists and the insurance industry.

According to the Insurance Research Council (IRC), it is estimated that 24 percent of auto injury claims may contain fraud or "build-up" which can add approximately $4.5 billion annually to auto injury settlements. The cost of such accidents deniably add hundreds of dollars to each year to your automobile insurance premiums. A personal injury underworld has become a pervasive criminal institution. So what do you do to protect yourself and your family from the frauds, fakers and racketeers.

Thursday morning on "FOX & Friends" (click here to watch the segment), I talked about how you can protect yourself from staged accidents which are quickly becoming one of the most common forms of insurance fraud in the United States. We showed dramatic videos prepared by USAA demonstrating many types of common accident schemes motorists should be aware of and discussed some tips you can implement in order to protect your financial future. I must tell you in my daily law practice it is one of the most disturbing things I see: accident fraud.

Let's talk about some of the staged accidents scenarios used by these rings most commonly in the staged accident capitals of the United States including New York, Newark, Boston and Los Angeles.

A staged accident is an accident in which the participants (except you) are all involved in the accident and are part of the scam to defraud either you or an insurance company.

According to the FBI, staged accidents cost the insurance industry about $20 billion a year and of course the losses get passed on to all of us in higher insurance rates.

Common Road Stings:

• The Drive Down

These often take place at four-way stop signs, T intersections, merge and yield signs, freeway ramps and parking lots. You, the victim, attempt to merge your vehicle into traffic and another driver, the scammer, waves you forward. You say to yourself, "what a nice guy", but instead of letting you in, he speeds up his car and slams his car into yours. When the police show up, he of course denies that he ever motioned to you or waved you forward or indicates that he was merely scratching his head or fixing something in the car.

• The Panic Stop

An old jalopy is filled with people ahead of you on the road. The scammer driving the old jalopy positions his car in front of yours while a back seat lookout in his vehicle waits for you to be distracted. Once he sees you're distracted, the scammer in front slams on the brakes and you rear-end the criminal's vehicle. Not only are you shook up, you shake your head and can't understand why the vehicle stopped so quickly. In order to provoke such accidents, staged accident rings will intentionally knock out brake light bulbs so that there is no warning the vehicle is slowing down.

• Swoop & Squat

On a surface street, this scam usually involves three vehicles: Two driven by the ring members and the other by you. The driver of the "squat" vehicle (full of passengers) puts his vehicle in front of yours, the second ring member driving the swoop vehicle pulls ahead of his comrade in crime and cuts it off causing the "squat" vehicle to hit his brakes. Obviously, you can't react in time and you rear-end the "squat" vehicle. Then incredibly, the "swoop" vehicle takes off from the scene never to be seen again. You the innocent driver play into the scam and blame the vehicle that took off — just as they planned.

Other criminal conduct involving auto accidents include witnesses to support the perpetrator's version of the accident and dishonest body shops who intentionally damage vehicles to inflate claims, perform unnecessary repairs or even supply previously damaged vehicles to inflate claims.

Companies like Allstate Insurance Company, State Farm and USAA, State Attorney Generals and local prosecutors are doing their best to shut down this type of fraud. Arrests, indictments and convictions have been brought all around the country busting up these accident fraud rings.

But what can you do to protect yourself?

1. Pay attention and avoid tailgating. Allow plenty of space between your car and the car ahead of you if the car ahead suddenly decides to stop.

2. Call the police and make a report. Even if the damage is minimal and everyone says they're okay and are feeling fine, call 911 and insist on a report being taken as to what the condition of the occupants of the vehicles is and what damage there was, if any, to the vehicles involved.

3. Be your own investigator. Carry a disposable camera to document the scene and the damage to the vehicles and the identity of the people involved. Get as many names and phone numbers and driver's licenses as you can collect.

4. Observe the physical condition and demeanor of everyone at the scene. Do they look hurt? What did they say after the accident?

5. Report the accident to your insurance company. Don't be pennywise and pound foolish in failing to report the accident. If you don't report the accident and a claim is made, then you may not have coverage for the money damages which are being claimed against you.

6. Beware of new friends. Understand that there are many good Samaritans but also know the person who suddenly appears at the scene trying to direct you to certain attorneys or doctors may be part of the scheme as well.

Obviously, auto accidents happen and they most often happen because people make driving mistakes. But also know that there are scammers out there who make a living colliding with you accidentally, on purpose.

The information contained in this column is provided as a service to visitors of and does not constitute legal advice or establish an attorney client relationship. FOX NEWS NETWORK, LLC makes no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this Web site feature and its associated sites. Nothing provided herein should be used as a substitute for the advice of your own counsel.

Peter J. Johnson, Jr., has served as a legal analyst for the FOX News Channel since 1997 and is president of Leahey & Johnson, P.C., a Wall Street law firm.