Floyd

Are any of these hypothetical situations considered insurance fraud?

1. You are involved in a minor accident that wasn't your fault. You have a claims adjustor from the other persons insurance company come and appraise the damage and they write you a check for $700. You decide that you can live with the cosmetic damage on the car, and spend the money on something else.

2. You are involved in a major accident that isn't your fault. The other person's insurance company tells you to get an estimate from a reputable shop in the area and they will write you a check directly. You take it to one shop and they give you a quote for $3000. You feel that is low, so you take it to another shop that writes an estimate for $5000. You only submit the $5000 estimate, and receive a check, then take the car to the other shop and have the car repaired for $3000. (This scenario is unlikely because most shops require a commitment before they will write you an estimate.)

3. You work for a car stereo shop and have purchased a high-end system for your car, but have purchased it at half price. It gets stolen 2 months later. You submit a list of items stolen along with receipts. Does the insurance company write you a check for:

a) The amount shown on the receipts.
b) The fair market value of the equipment that was stolen, which is probably above the amount you paid.
c) The cost of reinstalling the exact system back into your car from a competent retailer.

So what do you guys think?

RJL

Are you the real slim Shady?

gsr98vtec

technically yes, but what they dont know wont hurt them...most people know people and get an estimate for full price and then get a deal from their friends on the job

Cosworth

1. No (not a fraud, 'cuz you're living with the damage on your car)
2. No (kinda but not a fraud, 'cuz you want the best and it will cost $5k... not $3k)
3. Yes (you never paid for it @ full... you're pocketing the money that was never yours)

Bud

1. This is legal to my knowledge if you want to live with the damage.
Don't think about it as money to repair the car, think of it as compensation.
Usually the ins adjuster will low ball the estimate.
In the event that you take the cash w/o repair they save money over all of the
claims that they receive. So they write a low check expecting the shop to run
over that amount and bill the remainder back to the them.
2. In my experience, insurance companies have lists of reputable shops that they
will do business with. Often your choice only lies between those shops. Even if you find two shops that the Ins co is willing to deal
with, they will need a written estimate and bill from the SAME shop. Way too
easy to scam otherwise.
3. I have no idea on this one.

hope that made sense.

S&P500ITR

3...... You see, it hurts all of us in the our pockets because of the outrageous premiums that we pay because of little things like this. So you may think it may hurt them, but then you wonder why insurance costs keep going up. By all means if you have damage to your car, you should get it fixed. Shop around and get several estimates and always get the best quality work/parts needed to fix the car. It's just not right to abuse/take advantage of the system, that's all





[Modified by S&P500ITR, 8:03 PM 12/19/2001]

Piston Honda

I would think that #1 is the easiest to say it is not fraud. Obviously if your property was damaged in any way, you would like to receive compensation for it.

Scenario: A person borrows your CD player and accidentally breaks it. The person offers you money for the cost of what you paid for it. You do not neccessarily use the money to replace the broken CD player. Are you obligated to give the money back?

Floyd

I guess the question number 3 is really asking is: Is it the duty of the insurance company to reimburse you for the amount of money you spent on the items, regardless of whether you got a great deal or whether you were overcharged, or is it to replace the items themselves, at whatever price they can find them for?

Not to get too far OT, but what if you have a receipt that shows you spent $1000 on an antique table that got damaged, but the apraiser only valued it at $500?


[Modified by Floyd, 8:29 PM 12/19/2001]

lotus

Ahem... your are safe on both 1 and 2, but I doubt you would see that much variance if both the shops did a thorough estimate, and I doubt the insurance company woul settle for one quote if they are cutting a cheque to you..

As far as # 3 goes, ask yourself this... if your brother bought the stuff for you for Christmas, and it was a gift that you paid $0 for... would the insurance company owe you what you paid? Of course not...

They owe you what you had, less any applicable depreciation... If you bought it on sale and now the sale was over, the insurance will pay current market value,
or in most cases last known price... if they pay you the fire sale price, and the unit is no longer available then how could you replace it with something of the same quality? You couldn't...

I'd be screaming to the president of the world on this one if they didn't give me a fair amount to actually replace what I lost... And they could be guilty of bad faith..
( Just mention bad faith to your adjuster and watch his color drain... heh heh..)

BoM

this is the few reasons why, insurance is soo high here in new jersey
that and stolen cars up north!

Type R 1090

Scenario 2:

I would consider that fraud. although that situation is unlikely to happen the way you describe it. When I adjust auto claims, I will ask the insured to get at least two estimates and submit them to me. I will usually go with the lower one (unless I know the shop does bad jobs), tell the insured he's got my OK on that one and call the shop to arrange for them to bill my company directly. We usually do not just write a cheque to insureds without some safeguard in place to make sure the money is going where it's suppose to be.

db_racer

1) Definitely not fraud. My insurance company told me I could spend money from a theft claim on whatever I wanted.

2) Usually you have no say in the matter. The insurance company will only pay for per hour rate according to a guide they have. I had such claim and the adjuster did all the appraisal but did not give a dollar figure. Thye gave me a form (with nothing but a claim number) to give to the body shop of my choice. Body shop did the repair and no check or cash passed thru my hands.

3) Easy to get a way with but absolutely fraud

jmb

OK, how about this situation - somewhat similar to what he asked in 3 - you were extremely lucky and you bought a Type R for a very good price, say a 98 R with 35K miles for $10,000. If it gets stolen or totalled after a month, would you admit to the insurance company that you only paid $10K for it or would you accept the full market value of your car as compensation for your loss?

jmb

nsxtcjr

I think that's as lotus described it. An insurance company is going to reimburse you for the market value of a comparable car, regardless of whether you paid $10K for it or $40K.

I think so, anyway. Unless one of our members in the insurance biz knows better...



[Modified by nsxtcjr, 3:33 AM 12/20/2001]

2k1TypeR0610

1. No
2. No
3. If you give them receipts for what you paid, they will only reimburse you for what you lost. Most will actually get you the parts themselves as some of the bigger insurance companies have deals with certain stereo shops where they get the items at cost and shop gets the install.

Splat

#3 - Most companies deal with things like this as replacement cost. For example, I bought a new-in-box Pioneer cd player back in the day from a friend of mine. Cost me $200. My agent (mom) knew how much it cost. Then, when it was stolen, State Farm paid to replace the cd player with an equivalent model (same features, etc).

So, if you had not submitted receipts, you would get replacement cost for the items stolen. I'm not sure if installation is included in that (I want to say no, but I'm not certain). If you submitted receipts (all they need is model number and serial number, typically), you may just get what you paid.

Also note that if you do have a pimped-out system, or carry a lot of cd's and whatnot in the car, GET SUPPLEMENTAL COVERAGE! My roommate had his head unit and ~250 cd's stolen. He was paid for the deck, but not the cd's...

ZygSpeed

I recently had some insurance work paid for by Progressive.
There was a lot of "fine print" about fraud, and with that in mind I'd venture to say that:

2) would definately be considered fraud,
1) might be considered fraud (they paid for work that wasn't done)
3) think "replacement value"

Rdriver

1 is not fraud I know for sure. The insurance has paid for the loss. If you don't fix the car the money will compensate for the loss you will receive when you go to sell/trade the car.

2 You better not get caught...This would be hard to get away with. If some one elses insurance is paying for it.

3 Insurance will not pay for after market stereo equipment only origanal equipment. If it were stolen while the car was at your house, I think this would fall under your home owners policy.

Splat

You're mistaken on two counts. Insurance will certainly pay for aftermarket equipment. On a standard policy, comprehensive will pay for *permanently attached* equipment. Head unit, speakers, amps (if they are bolted/screwed down) are covered. *Loose* equipment (radar dectector, cell phone, etc) are NOT covered under the standard policy. Same with cd's - loose = not covered.

Now, interestingly enough, your homeowners/renters insurance will pay if, for example, your golf clubs were stolen. But media is specifically excluded. That's why I suggested SUPPLEMENTAL COVERAGE for vehicle contents. Talk to your agent, it's only a few dollars extra.

Caffeine Slug

Just speaking from my experiences with my insurance company....
2. I had some damage to my driver's side door. someone tried breaking in by prying off the door handle, apparently. the handle stuck out about an inch, and there was a crease in the door. my insurance company told me to take it around to several body shops, find the shop i liked, and get an estimate. they never told me to go to a specific shop, or even a selection of shops (several places I went told me that it's illegal for them to make me choose a place). I just found one I liked, and the shop worked out the cost with my insurance company. I never saw any money there (turned out to be about $1300 in repairs).

3. About 6 weeks later, the thieves finally DID get into my car. They stole an old Alpine tape deck, Alpine 6-disc changer, 6 cd's, and a crappy 6.5" tube sub (though it barely deserves to be called a sub ). The insurance co. told me to find the cost of equivalent replacement models, and they paid for that (minus the deductible, of course). Thankfully 6-disc changers are still around $250 or so. Got another $200 or so for the deck, $80 for the sub, and $10 each for the cd's (yes, they were covered. my insurance co. will cover up to X number of cd's though I'm not sure what X is).

Floyd

lol - the first thing that came to mind was the AFLAC duck from the commercials.

BTW, I had a system stolen from my old GSR many years ago, and they also took a CD wallet with 24 CDs in it. My insurance paid out a fixed amount per disc, and I don't have suplemental coverage, so I guess it depends on your provider. I took the oportunity to replace some of the discs I never listened to with some new ones. I guess this situation would fall under category 1 above.

Splat

True - I was basing my info on State Farm's policies here in NC. Policies vary from state to state and company to company...

Bottom line in all these insurance threads - call your agent. That's what they get paid for.

bojangs

now what about these motors we're dropping in our cars. if you have a $3000 hatch and dropped a $4500 itr motor in it how do they/should they handle it?? should they reimburse you for the amount the motor cost?? i'm going through this right now! i do have a receipt i'm showing them and they're talking some bullshit how a new motor only adds $700 to the total value of the car because that's what they would be able to sell it for. they say it doesn't matter what kind of motor it is or what i paid for it!! i've spent over $11k in parts (not to mention the $4k for the car itself) and they're offering me $4800 for the car (i can buy it back for a grand).. i hate insurance.. any ideas anyone??

sackdz

Back when I was in high school someone stole 2 books of CD's from our trip bus.... I got over $700 for them !!!


[Modified by sackdz, 3:32 PM 12/20/2001]

Type R 1090

Well any settlement they'll offer you will be based on market value of the car. I hate to say how they insurance companies will see it, but they'll say "it's a Civic". Unfortunately motor swaps ain't worth nothing to anyone but hardcore import fans.