Financial desperation may be driving more Californians to ditch their cars or set them on fire to get an insurance payout, according to the California Department of Insurance.
The state agency, led by insurance commissioner Steve Poizner, recorded 300 more suspected fraud cases involving arson and theft in 2008 than in 2007.
Experts say those crimes typically increase during economic downturns.
David Simon, a San Bernardino County, Calif., deputy district attorney with the organized auto insurance fraud unit, said he has also noticed an increase in "give-ups," where a person ditches a vehicle or sets it on fire to get out of car payments and get a check from an insurance company.
Many are first-time offenders with no other criminal record, leading Simon to believe they were in dire straits financially, he said. He said he seeks felony charges in more than 95 percent of his cases, which typically involve more than one person committing the fraud.
Arsons are especially suspicious, he said.
There were 580 suspected cases of auto insurance fraud involving arson and theft in Riverside and San Bernardino counties in 2008, an increase over the year prior and about 12.4 percent of the total suspected arson and theft cases in California, said Molly DeFrank, spokeswoman for California's Department of Insurance.
The agency estimates that every California resident ends up paying an extra $500 each in higher taxes to cover the costs that go along with investigating all insurance fraud cases, including auto fraud.
Individuals convicted of insurance fraud can face three to five years in prison and fines of up to $50,000 or double the amount of the fraud, whichever is greater, said DeFrank.
"The costs of auto insurance fraud are huge," said Pete Moraga, spokesman for the Insurance Information Network of California. "This is not a victimless crime. Somehow we all pay for it."
There's no telling if rates will rise as a result of the most recent increase in insurance fraud cases, but before companies raise or modify rates, they must seek approval from the Department of Insurance.
The state agency, led by insurance commissioner Steve Poizner, recorded 300 more suspected fraud cases involving arson and theft in 2008 than in 2007.
Experts say those crimes typically increase during economic downturns.
David Simon, a San Bernardino County, Calif., deputy district attorney with the organized auto insurance fraud unit, said he has also noticed an increase in "give-ups," where a person ditches a vehicle or sets it on fire to get out of car payments and get a check from an insurance company.
Many are first-time offenders with no other criminal record, leading Simon to believe they were in dire straits financially, he said. He said he seeks felony charges in more than 95 percent of his cases, which typically involve more than one person committing the fraud.
Arsons are especially suspicious, he said.
There were 580 suspected cases of auto insurance fraud involving arson and theft in Riverside and San Bernardino counties in 2008, an increase over the year prior and about 12.4 percent of the total suspected arson and theft cases in California, said Molly DeFrank, spokeswoman for California's Department of Insurance.
The agency estimates that every California resident ends up paying an extra $500 each in higher taxes to cover the costs that go along with investigating all insurance fraud cases, including auto fraud.
Individuals convicted of insurance fraud can face three to five years in prison and fines of up to $50,000 or double the amount of the fraud, whichever is greater, said DeFrank.
"The costs of auto insurance fraud are huge," said Pete Moraga, spokesman for the Insurance Information Network of California. "This is not a victimless crime. Somehow we all pay for it."
There's no telling if rates will rise as a result of the most recent increase in insurance fraud cases, but before companies raise or modify rates, they must seek approval from the Department of Insurance.
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