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Indicators of Vehicle Theft Fraud:
Most claims are legitimate, but some are fraudulent. Therefore, it is
appropriate to review all claims for possible fraud.
Determining the
"fraud probability" of any claim is facilitated when the adjuster is
familiar with various fraud indicators.
These indicators should help isolate those claims which merit closer
scrutiny.
No one indicator by itself is necessarily suspicious. Even the
presence of several indicators, while suggestive of possible fraud, does not
mean that a fraud has been committed.
These indicators are "red
flags" only, not actual evidence.
Indicators of Fraud Related to the Vehicle
Vehicle:
- was purchased for cash with no bill of sale or proof of
ownership.
- is a new or late model with no lien holder.
- was very recently purchased.
- was not seen for an extended period of time prior to the
reported theft.
- was purchased out of state.
- has a history of mechanical problems.
- is a "gas guzzler".
- is a customized, classic and/or antique.
- displayed "for sale" signs prior to theft.
- was recovered clinically/carefully stripped.
- is parked on street although garage is available.
- was recovered stripped, but insured wants to retain
salvage, and repair appears to be impractical.
- is recovered by the insured or a friend.
- purchase price was exceptionally high or low.
- was recovered with old or recent damage and coverage was
high deductible or no collision coverage.
- coverage is only on a binder.
- has an incorrect VIN (e.g. not originally manufactured,
inconsistent with model).
- VIN is different than VIN appearing on the title.
- VIN provided to police is incorrect.
- safety certification label is altered or missing.
- safety certification label displays different VIN than is
displayed on vehicle.
- has theft and/or salvage history.
- is recovered with no ignition or steering lock damage.
- is recovered with seized engine or blown transmission.
- was previously involved in a major collision.
- is late model with extremely high mileage, (exceptions:
taxi, police, utility vehicles).
- is older model with exceptionally low mileage (i.e.,
odometer rollover/rollback).
- is older or inexpensive model and insured indicates
- it was equipped with expensive accessories which cannot
be substantiated with receipts.
- is recovered stripped, burned, or has severe collision
damage within a short duration of time after loss allegedly occurred.
- leased vehicle with excessive mileage for which the
insured would have been liable under the mileage limitation agreement.
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