OAI: Report Underscores Consequences of Auto Insurance Thievery

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Agency says figures from first-half of 2012 show questionable claims on the rise

The National Insurance Crime Bureau (NICB) released a report Wednesday showing a rise in questionable vehicle-damage claims, highlighting the need for the public to understand the serious consequences that can come from trying to dupe insurers, according to Online Auto Insurance.

The NICB receives questionable claims reports (QCs) from car insurance companies that are unsure of the legitimacy of submitted filings and need further review of those claims. The number of QC referrals related to vehicle damage spiked 20 percent in the first half of 2012 compared with the same period in 2011, according to the latest NICB report.

The majority of QC referrals related to vehicles had to do with theft, which made up 30 percent. The next-largest reasons for referrals were suspected phony damage claims and suspicious claims in which a car was struck while parked. Those reasons accounted for 18 percent and 12 percent of all vehicle-related referrals, respectively.

Altering or falsifying claims or claim information is considered illegal in every state in the U.S., but each state enforces different penalties for such activities.

In California, the penal code specifies that filing a false claim for damage, destruction or theft of a car can result in a jail sentence of between two and five years and a maximum $50,000 fine if the claim was for $25,000 or less.

In Washington, submitting illegitimate claims for $1,500 or less is considered a gross misdemeanor that carries with it a maximum one-year jail sentence and $5,000 fine. Falsifying claims in amounts over $1,500 makes the offense a class C felony that can bring a five-year state prison sentence or $10,000 fine, or both.

The Nevada penal code says that submitting false claims in that state is a category D felony that can send a convicted person to state prison for between one and four years and bring with it a $5,000 fine.

And in New York, lawmakers are pursuing harsher penalties against violations individuals who try to steal from insurers with a trio of bills, saying offenses such as staged accidents and doctored claims have subverted the state’s no-fault coverage laws into a “state-sponsored, ATM machine.”

The bills seek to classify several auto-related violations in their own categories, as current state law singularly categorizes all offenses against insurers.

For more on this and related issues, head to http://www.onlineautoinsurance.com/companies/ for access to an easy-to-use quote-comparison generator and informative resource pages.

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Charles Nguyen
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