Throughout the country, individuals commit fraud on a regular basis by staging car accidents and collecting the benefits. States such as Pennsylvania are particularly inviting to these scammers as they are no-fault states. Under no-fault insurance, both parties involved in an accident must pay out. Accordingly, the payouts can be substantial.

States throughout the nation have been working hard to prevent these scams from occurring and Pennsylvania is one of the most aggressive. This is due to laws that were implemented in the 1990s. For instance, Pennsylvania laws require is that insurance companies report investigations they have conducted to the state. While these laws help keep auto insurance scams in check, they have not stopped them from happening.

According to the Pennsylvania Insurance Fraud Prevention Authority, since 2007, insurance fraud has increased 75 percent. There are three types of fraudulent auto insurance claims that are most often seen.

The most common fraudulent auto insurance claims are based on staged accidents and accident reports that are fake. These account for 68 percent of the scammer's claims. The second most common are known as "jump-ins." In these cases individuals quickly get into a car that has been hit and claim to have sustained injuries. They account for 25 percent of the fraudulent insurance claims. The last 7 percent consist of injuries that have been exaggerated.

Most people would like to see auto insurance fraud eradicated because in the long run, these types of scams ultimately end up costing all residents of Pennsylvania money. While the state has taken steps to try to reduce these types of incidents, most would agree that there is still room for improvement.

Source: WHPTV, "Scammers making millions off of staged auto accidents," Annie McCormick, Jan. 27, 2012