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Be ready for insurers to ask your car what really happened in an accident

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The next time you file an accident claim don’t be surprised if your insurance company wants to download data from your car or truck to make sure you’re telling the truth.

No one knows exactly how much auto-insurance fraud goes on, but experts peg the losses at up to $30 billion.

That covers a wide range of cheating, from lying on an application to staging accidents and bogus injuries. But deliberately deceitful accounts about how a wreck occurred are part of the problem, too.

Let’s say a driver sideswipes a parked car or backs into tree.

Instead of reporting the mishap as it actually happened, he drives to the mall, parks his car and claims to be victim of a parking-lot hit and run.

A law enforcement officer will more than likely take the driver at his word, write up the report as a hit and run, and the driver will file a claim with his insurance carrier.

Although insurers know this kind of fraud happens every day, they’ve chosen to pretty much ignore it.

That’s changing however, as those companies consider making better use of the Event Data Recorder (EDR) that’s in most vehicles today and will be in all new vehicles this fall.

For years, investigations into major accidents resulting in fatalities and lawsuits have imaged, or downloaded the data, from EDRs to help them reconstruct what happened.

EDR imaging is becoming to major accident investigations what DNA is to murder investigations.

I know this sounds a little like the “black box” authorities are always searching for after a plane crash.

That device records a continuous stream of data from virtually every system on the plane, and even conversations in the cockpit, from the moment the ignition is turned on until it’s turned off again.

EDRs don’t do that.

While information about your driving is constantly passing through the device – everything from the car’s speed to whether the brakes have been applied – it only stores about 8 to 10 seconds worth of data when it detects an accident has occurred.

If there’s no impact, or the car isn’t running, nothing’s recorded.

That’s how an investigator would determine the accident in the fraud example above didn’t happen as the driver reported.

If he was parked at the mall, there would be no event report stored in the EDR.

Unfortunately for this cheat, there would be an EDR report because he was driving when he struck the other car or tree.

Until now insurers didn’t think it was cost effective to provide adjusters dealing with less serious claims such as this with the pricey devices needed to tap an EDR.

But more than 80% of cars built since 2006 have EDRs and NHTSA is mandating that every new car and truck built after Sept. 1 must have one.

One insurer recently went back and imaged 30 wrecked cars on which it had already paid claims. It found that the EDR data would have changed its settlement in nearly half of those cases.

So the cost equation is changing and I suspect it’s just a matter of time before most adjusters are equipped to read EDRs and demanding to do so when you file a claim.

Of course the EDR — and any data on it — belongs to the car owner, who can technically refuse to give it up.

But you shouldn’t be surprised that the mouse print of your policy says any claim can be refused if you fail to cooperate with the company’s accident investigation. The police can always get a subpoena.

Basically, your EDR data is there for the taking.

I know what you’re thinking. I’ll just disconnect the thing.

No. You won’t.

Carmakers usually locate EDRs in the steering wheel airbag module so that they can’t be shut down without disabling the driver’s side airbag.

Since that’s illegal without a waiver from NHTSA no repair shop on the planet is going to do that. It’s also dangerous and you shouldn’t do it yourself.

Of course the insurance companies claim that anything they do to reduce fraud means lower insurance premiums for all of us.

I guess we’ll see about that.

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