No, we are not going to discuss the wildly popular game or the cult-classic by Ron Howard. This article will help you learn how car theft relates to insurance fraud. Obviously, car theft is a crime that refers to the illegal taking of cars, buses, motorcycles, snowmobiles, trucks, trailers, and similar vehicles. However, this does not cover aircraft, boats, bulldozers, and/or spacecrafts, which are separate crimes with different punishments. Car theft is a crime leading to a very large number of bogus insurance claims.

In almost every jurisdiction, car theft is punished as a felony, mostly due to the intense emotional and economic distress it creates for the victims involved. On the other hand, what if the car’s owner is the person responsible for the fraud rather than being the victim?

Fraud Schemes

Experts say that some of the most frequent fraud schemes include (in no particular order):

• Owner Give-Ups. The car’s owner lies about the car being stolen and then devises its destruction in order to collect insurance money. The claim will be that the car was stolen, but then it is usually found burned or mangled in a secluded area, submerged somewhere (like a lake, deep river, or pond), or, in the most extreme cases, even buried underground.
• 30-Day Specials. Those whose cars require extensive repairs are typical perpetrators of the 30-day Special scheme. They report the car stolen and then hide it for 30 days, the length of time it takes on average for the insurance company to settle the claim. Once it has been paid, the car is mysteriously found deserted.
• Export Fraud. After receiving financing through a bank loan for a new car, the owner signs an insurance policy to cover it. They then report the car stolen to law enforcement, but instead actually ship it out of the country to be sold on the black market. They can then get payment from the insurance policy as well as any dishonest profit earned due to foreign conspirators selling the car.
• Phantom Vehicles. A person designs a fake title or registration for the purpose of insuring the non-existent car. The “insured” then reports the car stolen so they can file a falsified insurance claim. In most cases, antique or luxury vehicles are used as phantoms, since they are more valuable and generate larger settlement amounts.

However, for authentic car theft victims, there are a host of effective anti-theft devices on the market. This could mean an alarm or similar device, or an ingenious method adopted by some states: a fine. Some states actually fine owners for not locking their cars properly when they leave the vehicle.

Thankfully, car theft has decreased in most states over the last ten years, granting peace of mind to many owners and insurance companies alike. In order to further put a stop to the crime, many states require that vehicle identification numbers (VINs) be registered with a vehicle licensing authority (such as the county courthouse or DMV), making it much more difficult to resell a stolen vehicle or acquire stolen parts.

See for yourself just how simple it can be to shop for auto insurance, get your free Dallas auto insurance quotes now!