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Although most insurance scams are directed from the insured at the insurer and not the insuree, remember that everyone, to an extent, is in the same boat here. Insurance is one of those deals that philosophers might label “tragedy of the commons”: everyone has an incentive to take advantage of the system, but the burden gets passed around to all. In general, an insurance company in financial trouble draws upon its customers to bail it out. And on a more specific level, for example, rising theft or accident rates in your neighborhood make you look like a higher-risk. Now that you have a personal incentive to keep a watchful eye, look out for some of the more common scams.

First, it’s pretty easy to take advantage of those simplistic, one-size-fits-all laws we have. Everyone knows that any rear-end collision is pretty much always the fault of the rear car, right? It’s not hard for an opportunist to scan the roads for a Mercedes to fill his rearview mirrors, slam on the brakes, and file a claim. The “victim” may also go off after the accident to inflict additional damage, and he may later claim more passengers were injured than were even in his car at the time.

It can get more complicated than that, of course. Getting money to fix one’s car won’t net much, but collecting to relieve physical pain can drive up the tab in no time. It can take some crooked body shop owners, doctors, and lawyers to pull these off successfully, but don’t think there aren’t any out there. Also beware of fake helpers who seemingly show up on the scene at the right moment. While he may seem to be a savior, he’s probably in on the scam and will likely recommend bogus body shops or physicians who will overestimate damages.

Stay skeptical around overly generous motorists. One example might be a merging situation in which the driver signals his intent to willingly yield to give you the right of way. Then he speeds up, a sideswipe occurs, and when the police arrive, he denies ever giving you any such signal.

Possibly easiest of all are “paper accidents”, where the cost of accidents are simply exaggerated on paper (by a shady body shop) or fabricated altogether. Perpetrators typically keep claims under $1,000 so insurers would be less apt to investigate. Which is what makes it so easy.

If cautious, preventative driving doesn’t work, then in any incident, the smart move is to document the responses, driver’s licenses, and plate numbers of everyone and everything, take a photo or two if you have a camera handy, and call the cops right away. If the other guy wants to lie, make him lie right there, unrehearsed, for the official record, to the face of the law. If anything comes up, it will be easier to fight it then.