More people may be torching cars, insurance group says
“Insurance industry crime monitor says number of suspicious fraud claims is going up.”
What do you do if you can’t afford to keep up with car payments?
Abandon it in a remote area and report it stolen? Or, maybe torch it?
Those are some of the actions that people are turning to in these tough economic times to get out from under car payments, according to an insurance industry group. “Desperate times sometimes cause people to take desperate measures,” said Joe Wehrle, president and chief executive of the National Insurance Crime Bureau.
The NICB statistics show that suspected auto arson claims have shot up 27 percent nationwide in the first quarter of this year, while water or flood damage claims were up 36 percent a trend that the organization terms “opportunistic fraud.”
The NICB works with insurance companies in analyzing, investigating, training and advocating for legislation in preventing insurance fraud.
According to California Department of Insurance statistics, 221 suspected fraudulent claims related to theft or arson were reported last year in Orange County. That’s up from 179 in 2006.
“Our investigators are reporting anecdotally that as the economy has worsened, auto insurance fraud has increased,” said Insurance Commissioner Steve Poizner.
A report by the NICB shows a nationwide increase in the number of suspicious insurance fraud claims in the first quarter this year compared to the first quarter last year, including:
Suspicious “hit while parked” reports 791 this year, 529 last year
Water/flood damage 49 this year, 37 last year
Phantom accidents 429 this year, 316 last year
Questionable vehicle theft 3,443 this year, 3,247 last year
Suspicious arson 757 this year, 596 last year
The nonprofit investigated questionable claims submitted by 1,000 of its members property and casualty insurance companies to compile the information.
A report released by the organization late last year says that California ranked No. 1 with 767 questionable car-insurance claims reported from 2004 to March, 2008.
Frank Scafidi, a spokesman with the crime bureau, did point out, however, that many of the claims the organization looked at turned out to be legitimate.
Jeffrey Spring, a spokesman for the Automobile Club of Southern California, said he called the club’s investigation team right away when he heard about the NICB report, anticipating learning of a spike in fraudulent or questionable insurance claims.
“In this economy, that’s sort of what we would have expected,” Spring said. Surprisingly, he said, “we haven’t seen anything out of the ordinary.”
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