Fake Car Insurance Claims

This article describes the cunning tactics car owners use for insurance fraud and why it is law-abiding policy holders who ultimately pay the price for dishonest behaviour.

They were partners in crime as well as partners in a relationship. A San Francisco couple rented a brand new Lexus with extensive insurance cover. But then, in 13 days, they rang the police saying that the car had disappeared. What was actually the case was that the car had been packed up in an overseas shipping container in preparation to be moved to Hong Kong. Investigators believe it was being prepared for shipment well before it was reported stolen. In fact, the luxury car was one of more than 100 that the couple had shipped to the Far East as part of an insurance scam they were running. And as a result, they were arrested.

While this case happened in the United States, it is also a classic example of the sort of insurance fraud you can encounter here in the United Kingdom. Just ask the police or insurance firms. Both will tell you that it is too often the case that the owner of a car or the person who reports a vehicle stolen is the instigator of insurance crime rather than the victim. And why should you care? Because if insurance firms cannot cover their costs and continue to loose money through fraud cases, the expense is going to be passed on to other law-abiding policy holders. Insurance firms need to increase their premiums to cover their costs, says an Association of British Insurers spokesperson. And she adds that insurance fraud is at least one of the contributing factors in a recent increase in premiums in the UK car insurance industry. (car insurance)

Consider these for underhand tactics. A car owner destroys their vehicle. They dump the vehicle in a river or lake somewhere. Or else they burn it then leave it in a far off place before reporting the vehicle stolen. The motive? The owner wants quick money without the hassle of selling their car. Or perhaps the owner cannot afford to keep up the insurance payments or is unable to pay the vehicles repair bills. Alternatively, they might just simply hide a vehicle for 30 days and buy a new one. Then when the vehicle gets found dumped somewhere, the insurance firm becomes the owner of that car and the original owner has a better vehicle with the insurance money that they have been paid. (loan costs)

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