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- California Department of Insurance sees spike in auto insurance fraud cases during recession
California Department of Insurance sees spike in auto insurance fraud cases during recession
California is seeing a disturbing uptick in fraudulent auto insurance claims in 2008 as motorists feeling financial restraints are turning to desperate measures after falling behind on their car payments, according to state Insurance Commissioner Steve Poizner.
California is seeing a disturbing uptick in fraudulent auto insurance claims in 2008 as motorists feeling financial restraints are turning to desperate measures after falling behind on their car payments, according to state Insurance Commissioner Steve Poizner.
According to a recent study by the California Department of Insurance (CDI), the state has seen a 31 percent increase in vehicle arson claims that are being investigated for being fraudulent in 2008. While the state had received 344 referrals of potential auto fraud claims in 2007 - before the onset of the current recession – that number reportedly jumped to 451 in 2008, according to the CDI.
The CDI also reported they had received approximately 200 more suspected vehicle theft fraud case referrals in 2008 than they had in 2007 as well.
"Many Californians are facing a host of financial challenges in today's economy, but I want to remind everybody that you will only compound your problems if you break the law and commit fraud in search of a quick fix," said Poizner. "Department of Insurance investigators have seen an increase in suspected automobile arson and theft fraud cases recently, and our enforcement experts are working hard to crack down on anyone attempting to skirt the law for financial gain."
California is only the latest state to address auto insurance fraud, which had become an increasingly widespread problem throughout the country during the current recession. In April, ABC News reported that an "undeniable" increase in auto fraud cases had been seen in 2008 in such major cities as Houston, Las Vegas, Los Angeles, and Chicago.
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Posted: August 27, 2009
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