The Car and Truck Fleet and Leasing Management Magazine

Auto Insurance Fraud on the Rise

December 30, 2008

State officials across the nation are reporting a spike in auto insurance fraud, according to a report from The trend seems to be just another sign of economic hard times.

In Indiana, Michigan and New York, burned car claims have jumped 13 to 18 percent in  the past year, State Farm said.

Scores of cars reported stolen are turning up abandoned in Lake Erie and in Western deserts. Crime rings are burning cars for hire in California, Kiplinger reported. A New Jersey principal recently pleaded guilty to charges that he torched a leased car that had racked up $9,000 in excess mileage fees.

"Increasingly, people are turning to insurance fraud as a quick bailout for their financial misery, to get out of auto leases they no longer can afford, and to pay off credit card or mortgage debt," James Quiggle, a spokesman for the Coalition Against Auto Fraud, told

The state of New York has committed more resources to curbing the trend. Through October, New York had won 110 court decisions requiring motorists to give up insurance money and ownership of vehicles determined to have been intentionally burned, stolen or sent to chop shops for disposal, Kiplinger reported. That's 50 percent more than the previous year.

A Nevada task force is using helicopter patrols to help spot suspicious vehicles taken out to the desert to be destroyed.


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