Arson in the car insurance industry

There’s a new trend coming about in the car insurance industry–arson. It’s a little way that owners of sports utility vehicles and other gas guzzling cars have used to cope in this hard period after gas prices have gone so high, and it started in Southern California and is working its way across the rest of the country. It was first noticed in 2005, in the summer, when the first big jump in gas prices occurred.

The crazy thing is, it was mostly conducted by a car dealership. Authorities traced the multiple fires back to the dealership called Cerritos in California. It appears that, when customers called in complaining about gas prices and wanted to trade their gas guzzlers for a more fuel economic car, the dealership refused. That wasn’t all it did, though. It put them in contact, then, with an arsonist that would accept their keys and torch their car so they could collect on the insurance, all for a low cost of three hundred dollars. The drivers could then use their car insurance settlement to get into cars with better fuel economy.

The authorities did a sting operation and pretended to be a driver that wanted to have his car burned. They caught the arsonist, and those in the car dealership responsible for arranging the contacts with him. Now, the question is, what effect does this have on everybody else? The truth is that when a lot of claims are being made on comprehensive coverage, car insurance costs for everyone goes up, especially when those claims are fraudulent.


Fashun Guadarrama.

Posted in: Auto Insurance

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  • Henry

    Great post Austin! I will bookmark your site.