Auto insurance fraud is dramatically on the increase. Non-profit sites like the Coalition Against Insurance Fraud report that auto insurance fraud costs in the region of $12.3 billion or more each year. What's more it is a very lucrative business for the criminals.

But how is this type of fraud generally perpetrated and how can you tell if it has happened to you?

Auto insurance fraud often comes in several guises the more common ones being these:

STAGED ACCIDENTS

An accident is staged in which the drivers of two or more vehicles intentionally collide with you. Normally a driver will pull up in front of you by temporarily slamming on their brakes and their accomplice will run into the back of you.

They then make it look like it was your fault.

FAKE HELPERS

Scam Helpers will wave an innocent driver into traffic, but then an accomplice will deliberately crash into the driver. Again the innocent driver appears to be at fault.

AUTO REPAIR SHOPS

Auto insurance fraud is increasingly being committed by auto repair shops. They scam insurance companies in several ways.

They may bill for work not actually performed on the car, they may over quote on the work, charging more for it than they should, claim for property stolen from your vehicle that actually did not exist in the first place or deliberately cause further damage to your car for which they bill the insurance company.

OTHER SCAMS

Several other auto insurance scams have recently been reported including:

• Falsely reporting a car as stolen
• Fake hit-and-run claims
• Destroying a vehicle by setting it on fire

Being aware of these scams and frauds can help you to avoid them and ensure you are not considered to be part of the fraud by the insurance company if they suspect a fraud has taken place.

Trying to prove your innocence in some cases may be hard to do.

Now you are aware of some of the more common auto insurance frauds you know what to look out for and can potentially avoid them.