Recession Leads to Fraudulent Auto Insurance Claims

by Diane Tuazon
NewsWest 9

MIDLAND/ODESSA - We've all heard of car thieves who take parts from cars and sell them, but lately another kind of theft is becoming popular. 

More car owners who are desperate for money are putting in false claims with insurance companies in order to collect the cash. 
"Everytime there's an economic struggle within our community they tend to be more tempted to try things and get away with things than they would normally," Sergeant Alfredo Grimaldo with the Midland Police Department, said.

Everything from faking hail damage, to setting your own car on fire, and Sgt. Grimaldo says if you're found guilty that could lead to more serious consequences.

"Obviously everytime someone reports they've been a victim of arson or auto theft then investigators follow up on them at the very least, they'll be charged for false report to an officer. That could lead to felony level and depending on the crime, they maybe prosecuted federally," Sgt. Grimaldo said.

Houston Copeland of Nationwide insurance says to him, it's been an ongoing thing.

"Some examples are insuring cars with prior damage, listed a car stolen, torture, using a hammer as hail damage. Ball paint hammer has been a pretty common tool, but experts can tell if it's a fraud," Copeland said.

Both law enforcement and insurance agencies aren't backing down, they're going to be looking a lot closer at any suspicious claims.

"If they're defaulting on payments, late on payments and all of a sudden their car is found to be caught on fire or stolen, this is something that we look at immediately and if it's going to be a fraud case," Grimaldo said.

"All insurance companies have fraud units now and all they do is investigate," Copeland said.