How customers get auto insurers to pay for preexisting damage (and how to stop them)

Say you have some damage to your car: nothing big, maybe a few dents up front with some scratches amounting to a few thousand dollars in repairs. You’d like to get the insurance company to pay for it but you’ve only got state minimum liability coverage. You’re out of luck, right? Not if you’re willing to cheat. This is the story of Mr. Smith, (not his real name) a mild-mannered accountant who hated paying for auto insurance. Mr. Smith was a 'Policy Rocker', a type of fraudster that preys on insurance carriers and their customers.

Every year Mr. Smith would sign up for the state minimum required liability insurance on his cars. Occasionally his cars would have a fender bender or other damage. When the total damage on any one car grew to between $3,000 and $5,000, Mr. Smith would sign up for an expensive low deductible comprehensive auto insurance policy. In the first week to month of that policy he would file a claim for the accumulated damage on the car, claiming a fictitious casualty ‘event’ that just happened to not have a police report.

Now the insurance carriers that Mr. Smith did this to weren’t stupid. They knew that his claims were a bit ‘odd’ but without proof it was just Mr. Smith’s word against their suspicion. Proving anything would have taken time that carriers didn’t have because regulators require that claims be paid rapidly. Besides, the claims were always fairly small, too small to waste an investigator's time on. So the carriers (there was more than one over the years) just paid. His car gleaming like new, Mr. Smith then cancelled the comprehensive policy and return to his low dollar liability policy until the need arose again.

We call his shifting back and forth between state minimum and comprehensive insurance ‘policy rocking’. Mr. Smith was a hard-core policy rocker, rocking back and forth for many years (and for all we know is still doing it to another carrier).

But with the right tools carriers can shut down the Policy Rocker’s game. The key is identifying likely ‘rockers’ during the quote and application process using specialized business rules. When the rules fire they initiate a specific intervention process that contacts the consumer or his agent through the carrier's quote system. The suspected ‘rocker' is then asked to take photos of his vehicles using a specially designed web app sent to his smart phone. This app takes the consumer through a secure imaging process while registering the GPS, Date/Time and other data that makes it hard to spoof. We call it idMobile.

But the Mr. Smiths of the world usually don’t get that far because once they realize they've been caught, they go down the street to brand X. Which is just fine by us. We're VeracityID and we build real time fraud identification and intervention tools to stop this kind of dishonest.