At first blush, some auto insurance claims may seem like nothingspecial. An insured claims his car was hit by a driver who fled thescene. He didn't catch the license plate number, but he thinks thecar was a white, mid-size, older model. You pull up his file andsee this insured has had a string of bad luck lately and this ishis third accident in 18 months. A previous accident did notinvolve another vehicle and the other involved a deer.

You ask him to send you some photos of the damage and noticegreen flecks of paint in the damage. After checking the claimant'sstatement, you see he described the car that hit him as being white— green flecks don't usually come from a white car — somethingisn't quite right.

There are many reasons for an insured to file a false insuranceclaim and most have a financial motive. Chris Tidball, a casualtysolutions consultant with Mitchell International, recommendschecking to see if the insured is in over his head or has recentlylost his job. “Is the vehicle financed? Was the owner upside down,”he asks. “If the owners owe $500 a month on a car and they starthaving problems, there is an incentive to get rid of the vehicle.”With a transmission or engine running several thousand dollars toreplace, it is easy to see why an insured would consider otheralternatives.

Owners who are behind on their car payments or way over themileage limits on a lease could also have financial reasons forhaving an “accident.”

Not every claim involves fraud, but there are some red flagsthat could indicate a claim is at least worth a closer look. Hereare 10 to consider.

Red flag #1: Phantom hit-and-run crash

Hit-and-run crashes can take several forms according to theCoalition Against Insurance Fraud (the Coalition). “The so-calledvictim driver hits a parked car, then lies that another driverrammed their vehicle and fled,” explains James Quiggle, TheCoalition's director of communications. “Or he lies and says thatthe phantom vehicle forced him off the road into a lamppost orother obstacle with no vehicle-on-vehicle contact. Pre-existingdamage is then falsely chalked up to a phantom hit-and-run.”

According to The Coalition, the state of Maryland is one of thestates considering a deterrent bill that would help identifyfraudulent claims from motorists involved in hit in a hit-and-runaccident. Under the bill both vehicles must make contact, thehit-and-run driver's license plate must be identified, a policyreport must be filed and the vehicles must make contact.“Frequently dishonest motorists invent hit-and-run crashes to coverup their own negligence,” says Howard Goldblatt, director ofgovernment affairs for The Coalition. “More hit-and-run crashartists will be stopped in their tracks if Maryland imposes higherstandards that expose insurance scams that are raising premiums forhonest drivers.”

Red flag #2: Staged accident with multipleclaimants

“Staged accidents tend to be low impact and can result inimmediate attorney representation of multiple occupants,” saysPeter Crosa, a Florida-based independent insurance adjuster andpresident-elect of the National Association of IndependentInsurance adjusters.

“Frequently, the crash may involve a number of locals pilinginto a rental car that is rear-ended by another group of locals ina rental car or a commercial vehicle. These accidents also tend tobe low impact with all of the claimants going to the samechiropractor or medical provider and following a similar diagnosticprocess.”

Claimants should be able to tell you who their doctor is, howthey get to the office for visits, where it is located, describewhat the office looks like and how frequently they visit. Theinability to answer any of these simple questions could be anindicator of a fraudulent claim.

Red flag #3: Questionable policy coverage

“Is there recent insurance on the car,” asks Tidball. “Perhapsthe insured had Liability coverage for years and then just addedComprehensive. That's a red flag. Same thing if it is a brand newpolicy, usually within 30 days of inception.”

Some related red flags include the insured purchasing insurancefrom an agent who is located far from where the insured lives orworks, if the policy coverages seem unusual for the age and modelof the car, or if the loss date is near the beginning or end of apolicy period.

Red flag #4: Unusual insured behavior

Pay attention to how an insured acts and what he or she sayswhen filing the claim. Verify that any identification used isauthentic. If the insured prefers to handle business in personinstead of by mail, that could be an indicator of fraud because theinsured may not live at the address stated on the policy. If theinsured is difficult to reach by phone or gives conflictingstatements about what occurred, more investigation may berequired.

An insured who seems extremely knowledgeable about his or herrights, medical or vehicle repair terminology or insurance ingeneral may warrant closer scrutiny.

Red flag #5: Medical bills and treatment

Frequently in low impact accidents, claimants will complain ofsoft tissue injuries such as headaches, muscle spasms, strains orother physical traumas. If the medical claims for a relativelyminor, low-impact accident are extensive, are not itemized forspecific treatment or documentation submitted involves photocopies, ask more questions.

Red flag #6: Financial issues

Like the scenario listed earlier, insureds who have recentlylost their jobs, whose hire date may have occurred just before theaccident, are self-employed or related to an employer, or whoseincome may not match their occupation could be worth a secondlook.

Red flag #7: Service providers

Who is involved with the claim for an insured can sometimes bean indicator that a claim may be fraudulent such as an attorney whosends a representation letter the same day as the accident, whetherthe insured or claimant owns an auto-related business like a bodyor auto repair shop, or a physician who is treating all of theclaimants from a crash.

Red flag #8: Frequent crasher

“A claimant who has a history of similar accident scenarios suchas being rear-ended several times before could be a red flag,” saysCrosa.

Failure to contact the police and file a police report could beanother indicator or even the use of an over-the counter policereport for a severe accident adds Tidball.

Red flag #9: Vehicle ownership

An insured who has trouble producing keys for a damaged vehiclemay not be the actual owner.

“How many sets of keys does the owner have,” asks Tidball. “Mostpeople have two sets. If there is only one, then that could beindicative of an owner give up.”

Also make sure to check the purchase price of a vehicle toensure it wasn't exceptionally high or low for its make and model.Verify that the vehicle identification number matches the insuredvehicle on the policy. If the insured presents an out-of-state,duplicate or salvage title as proof of ownership, or if the vehiclewas stolen or involved in a major collision, that should garner asecond look as well.

Red flag #10: Burned to a crisp

There is a mistaken belief that setting a vehicle on fire willdestroy all of the evidence, but the reality is there are alwaysitems that survive. Whether it is the gasoline-doused rag that wasstuffed in the gas tank, the old newspapers strewn across the backseat or the unpaid bills in the front seat, not everything willburn and these clues can provide insight on how and why the vehicleburned. If the vehicle is found in an empty, abandoned area, thatis one red flag. The unpaid bills in a glove box could provide moreclues, as do the burn patterns on the vehicle. If the vehicle isolder and seemingly over-insured, that could be another reason tolook more closely at the claim.

There are dozens of reasons why an insured might file afraudulent auto claim, but being proactive in the investigationwill help limit the impact of those false claims for insureds andinsurers alike.