By Andrew Happer, MBA, M.Eng., P.Eng., CFEI and Michael Peck, P.Eng.

Insurance fraud has been around for years and is showing no signs of slowing. Not only are there individual policyholders looking to make a quick buck on a claim, but organized crime has also entered the fold. It is believed that auto insurance fraud, which involves acts committed to fraudulently obtain payment from an insurer, costs taxpayers over $1 billion annually. Insurance fraud is a crime and there is a growing need to identify fraudulent claims to make those responsible accountable for their actions and reduce the costs for honest policyholders.

Fraudulent auto claims can range in severity from those that are slightly exaggerated to those that involve someone deliberately causing damage. Claims that warrant special investigation are normally flagged by claims adjusters for any number of reasons. An insured might have an extensive claims history, thereby, deeming a review of the merits of the current claim. An insured might be exhibiting suspicious behaviour that causes concern with the validity of a claim. Alternatively, conflicting versions of events can suggest someone is stretching or not telling the truth.  The quantum of the loss may also be an indicator that a claim is being exaggerated.

When considering these factors, a special investigation may be undertaken to verify whether insurance fraud is taking place. In these cases, a forensic engineer can provide very useful insight. As part of CEP Forensic’s collision investigation work, we have become attuned to the contact markings that result from certain types of collisions and can effectively evaluate whether described versions of events surrounding a loss are consistent with observed vehicle damage and other physical or digital evidence.

Fraudulent auto claims can take many forms and we have aided in cases such as these:

  • Multi-party staged collisions. These involve fraudsters staging a collision between two vehicles. They are sometimes done with a stationary vehicle that is claimed to have been moving at the time, which can be disproven from inspection of the vehicle damage. Also, a review of electronic data stored in the vehicle’s Event Data Recorder (EDR) or infotainment system can also confirm the vehicle motion and whether the vehicle’s route taken at the time of the incident was consistent with the described event.
  • Alleged hit-and-run claims. The vehicle owner alleges that another vehicle struck theirs while it was parked when, in fact, the owner caused the damage themselves. Identifying the location of the damage on the vehicle, the nature of the markings such as directionality, as well as the pattern of markings are all features that can determine whether the damages were consistent with the described event. In addition, the vehicle may have stored electronic data in the vehicle’s EDR or infotainment system that can confirm whether the vehicle was being driven or not when the alleged damage occurred.
  • Phantom vehicles. The vehicle owner claims that another vehicle cut them off causing a loss of control and subsequent crash. Analysis of the vehicle’s path on and off the roadway can confirm the driver’s steering response and whether the incident occurred as described. Additionally, advanced driver assist systems are a new developing technology and starting to record information about objects sensed in front of a subject vehicle. The electronic data from these advanced systems can confirm whether a vehicle was sensed in front of the subject vehicle at the time of the incident.
  • Enhanced damage. These instances involve vehicle owners claiming that old unrelated damage was part of the incident or, alternatively, the owner enhances the contact damage with additional simulated impacts to expand their claim and get additional repairs completed. These cases do not always involve exterior body panel damage but can include pre-existing engine damage that the owner alleges to be part of the claim. Close inspection of the vehicle damage can show what contact areas are consistent with the described event and whether the reported engine damage is also consistent with the described event.
  • Mimicked hail damage. These claims involve vehicle owners that damage the vehicle purposefully with a tool and claim it was related to a hailstorm. Sometimes the vehicles have legitimate hail damage, but the owners enhance the damage by creating additional markings with a tool to get repairs done to a larger portion of the vehicle or try to make the claim a total loss. There are identifying features and patterns in the dents that confirm whether the dents were caused by hail or some other type of rigid or sharp object.
  • Alleged theft. The vehicle owner claims their vehicle was stolen but then the vehicle is found and has sustained engine and/or body damage. Inspection of the door handles, door locks, windows and ignition can confirm signs of forced entry. An electronic scan of diagnostic trouble codes can be completed to identify pre-existing operational issues with the vehicle engine. Infotainment system data can show historical vehicle routes through GPS logs and the presence of mobile devices that connect to the vehicle, as well as certain types of vehicle events that occur. This data can confirm whether the vehicle owner was in or around the vehicle during the time of the theft, in addition to the vehicle’s location during the time of the alleged theft.
  • Occupant identification. The vehicle owner claims another person was driving the vehicle at the time of the collision. This is commonly reported when the person claimed to have been driving is an unidentified individual who fled the scene. Contact markings inside the vehicle can confirm occupant contacts and seat positions can show the relative size of occupants. These markers along with trace organic evidence (e.g. hairs, make-up, clothing fabric) can identify occupant seating positions. Furthermore, electronic data stored in the EDR can identify both occupant presence and size of the occupant in the front passenger seat.

In almost all instances, it is important that the subject vehicle is examined as soon as possible after the incident. This allows close-up observation of the contact markings and vehicle damage, in addition to imaging of the electronic modules on the vehicle to capture details from the time of the loss. Engineering analysis of the physical damage and electronic data provides a means of understanding the collision circumstances and whether those findings are consistent with the circumstances described by the vehicle owner. These analyses provide great benefit to insurance companies in identifying when fraudulent claims are at play.

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