Staged crashes, repair costs driving up car insurance rates

Published: Jan. 18, 2014 at 1:57 AM CST|Updated: Jan. 25, 2014 at 3:23 AM CST
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NEW ORLEANS, LA - Auto insurance rates will increase for many drivers in Louisiana in the next few weeks.

State Farm Insurance points to rising repair material costs and increased insurance fraud.

State Police say dangerous criminals drive up premiums for all insured Louisiana drivers.

Videos from the National Insurance Crime Bureau show scenarios of how, according to State Police, criminals are targeting innocent drivers in order to rack up insurance claim dollars.

Lt. Trevor Smith, the supervisor for the Louisiana State Police Insurance Fraud/Auto Theft Unit, estimates staged accidents like these happen every few days in cities across Louisiana.

"We call them 'staged crash rings' because they actually are criminal rings. We have people who are acquaintances, relatives, or paid by people to actually involve themselves in crashes," said Smith.

According to State Farm Insurance spokesperson Gary Stephenson, criminal activity directly influences liability insurance costs.

"The cost of fraud itself impacts insurance costs about $600 a year for the average American household," he said.

Stephenson said the fraud drives up the number of claims and the chance of litigation, which is something Louisiana can't afford much more of. He said Louisianans sue each other over auto accidents more than drivers in any other state.

"Any dishonest claim exaggerates the cost that we all have to pay," Stephenson said.

Stephenson said State Farm insures one in three of all insured drivers in Louisiana.

The rate increases will take effect Feb. 17. Stephenson said rates will increase by an average of $35 a year.

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