24% Increase in Insurance Fraud as People File Bogus Insurance Claims
Friday, September 4th, 2009 | posted by: Julie Magee
Insurance industry and law enforcement officials are reporting up to a 24 percent increase in the number of bogus insurance claims due to owner’s desperation to get out of paying their monthly car note. Nationwide people are setting ablaze, hiding in woods, dumping or driving cars and trucks in lakes and rivers and then contacting their insurance carrier seeking a claims check. We are seeing it grow more and more as the economy gets worse and I bet you are seeing it too.
Fraud Indicators
Some of the most common vehicle theft fraud schemes include:
- Owner Give-Ups — The vehicle owner lies about the theft of his vehicle and then orchestrates its destruction to collect insurance money. He claims his vehicle was stolen, but then it is found burned or heavily damaged in a secluded area, submerged in a lake, or in extreme cases, buried underground.
- 30-Day Specials — Owners whose vehicles need extensive repairs oftentimes perpetrate the 30-day Special scam. They will report the vehicle stolen and hide it for 30 days — just long enough for the insurance company to settle the claim. Once the claim is paid, the vehicle is often found abandoned.
- Export Fraud — After securing a bank loan for a new vehicle, an owner obtains an insurance policy for it. The owner reports the vehicle stolen to a U.S. law enforcement agency, but in reality it was illegally shipped overseas to be sold on the black market. The owner then collects on the insurance policy, as well as any illegal profits earned through overseas conspirators who sell the vehicle.
- Phantom Vehicles — An individual creates a phony title or registration to secure insurance on a non-existent vehicle. The insured then reports the vehicle stolen before filing a fraudulent insurance claim. Oftentimes antique or luxury vehicles are used in this scheme, since these valuable vehicles produce larger insurance settlements.
