Insurance regulators and state authorities in California report a 31% increase in auto arson fraud cases since 2008.
Reports say that according to California insurance regulators, the dramatic 31% swelling of auto insurance fraud involving arson is a clear manifestation of the effects the economy has on people. Negative trends in the economy are pushing residents to make harsh actions to cash in on insurance policies. California Commissioner Steve Poizner mentioned in an interview that the latest compiled figures by his department illustrate that a number of scam artists and people that are fiscally desperate keep on increasing, which leads to more instances of auto insurance frauds.
However, insurance industry insiders in California are not that surprised that the same phenomenon happening all over the United States is now taking place in California. Insurance consultancy companies say that California is not alone in facing auto insurance fraud. States like New York and Maryland share this same plight of having residents who file fraudulent policy claims.
According to studies, the way of thinking of accused fraudsters appear to be similar in the three states mentioned. After years of paying premiums for insurance, policy holders feel that they are entitled to money they spent, now that they are hard up on cash. Since they hardly get involved in car accidents, they believe it is only fair that they get their money back now that crisis is at hand.
The Department of Insurance in California saw the 31% increase in auto insurance scam cases from 2008, and 10% increase in the number referrals for suspected vehicle arson. It has been reported that Commissioner Poizner mentioned that this overall trend for California is alarming, with fraudulent activities consistently increasing since 2007. The numbers were tolerable in 2007. Come 2008, the California Department of Insurance (CDI) received approximately 300 more suspected fraudulent car theft and vehicle arson claim. Moreover, in 2008, the CDI also reported to have received approximately 200 more suspected fraudulent car theft referrals. Now that 2009 is nearly closing in, the numbers seem to have gotten worse.
Still, rough economic times are blamed for the continuously increasing cases of car insurance fraud. A congregation of monetary challenges is faced by residents in California, but this is not an excuse to go against the law and to commit insurance deception.
State authorities in California are now studying what plans of action they are going to take, to make fraud cases go down. Insurance insiders fear that if the government will not control the situation, a cloud of distrust will start plaguing the auto insurance industry.