Insurance Fraud Perpetrators are Creative We All Do it Fraud
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The California Court of Appeal, in Cassim v. Allstate Insurance Co., 94 P.3d 513, 33 Cal.4th 780, 16 Cal. Rptr.3d 374 (Cal. 07/29/2004), was faced with a trial verdict of bad faith against an insurer that it found was based upon prejudicial final argument leading the jury to believe that “some fraud” is permissible
The law in California, as it should be everywhere, is that an insured cannot commit a little fraud. You either commit fraud or you do not. You cannot commit a little fraud any more than you can be a little dead. If you commit fraud, regardless of the bad faith of the insurer, you recover nothing.
Hard Fraud
The following types of fraud are premeditated and intentionally committed.
Those who differentiate between types of fraud would place these in the category of “hard fraud,” which is considered more egregious than “soft fraud” since it is performed with malice aforethought. Hard fraud takes planning, scheming, and even someone on the inside to help you get money from an insurance company. An example of hard fraud would be getting into an accident on purpose so that you can claim the insurance money. This example is fairly prevalent lately; someone hits the brakes so that the person behind them can’t stop quickly enough. Another really severe form of hard fraud would be faking your own death or murder for the life insurance death benefit. T
he Staged Loss
A theft where the owner contracts with an intermediary to dispose of a vehicle. The owner ‘gives up’ the vehicle and then reports it to the insurer as stolen.The person to whom the vehicle is given up will pass it to a salvor who breaks it up into its component parts and sells the parts (a “chop shop.”)
Staged theft also includes cases where the insured ships an auto to Mexico, China, Vietnam, or other foreign country where it is sold after which the insured makes claim reporting the vehicle stolen. All staged thefts are planned and performed for the sole purpose of defrauding an insurer. Abandonment The owner abandons a vehicle on a city street or in a parking lot, creating a morale hazard. The insured will report the vehicle stolen and attempt to collect before it is recovered. Dumping When the owner disposes of a vehicle by dumping it into a lake or other body of water. Cars have even been found buried underground and some lakes have been found to have more than 50 cars underwater.
© 2021 – Barry Zalma
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