Manchester police are pulling the charred shell of a mini-van from the sandy soil of a ditch in the city’s Rock Rimmon Park. The vehicle has been burned beyond recognition and the VIN numbers have been scraped off. On the scene are news crews, police and residents; there’s also an insurance investigator.
The park, known to residents and police as "Black Acres" has long been a popular dumping ground for stolen vehicles. It’s become so popular that police purchased a dirt bike to patrol the grounds and residents have taken to placing large boulders and barricades in front of park entrances to prevent vehicles from entering.
In these tough economic times, however, the park has also become the destination of choice for many city car owners looking to dump too-expensive or unwanted autos. Catherine Tucker, prosecutor for the NH Insurance Department, says that owners aren’t just dumping vehicles; they’re also reporting them stolen so they can cash in on insurance claims.
"We’re seeing an increase in these cases," said Tucker. "Oftentimes [a vehicle owner] will dump a car, report it stolen or missing and then the vehicle will be found totaled, burned out, or dumped in a river."
Nationally, agencies that track insurance fraud are seeing more of these cases. Jim Quiggle, director of communications for the Coalition Against Insurance Fraud, says all forms of fraud are up, particularly vehicle-related types.
"We’re definitely seeing increases in New York, Southern California and South Florida," said Quiggle. "You could overlay a map of the nation’s economic misery and there’s a good chance that you’ll see a spike of fraud in those areas."
In South Carolina, maritime officials are dealing with an outbreak of boat give-ups. In a recent New York Times article, author David Streitfield wrote of one man who sank his boat in Puget Sound and then reported the "accident" to his insurance company. He was recently convicted of insurance fraud.
The current atmosphere, Quiggle says, is very similar to the upturn in fraud that occurred during the national recession of the late 1980s and early 1990s. Quiggle says these crimes abound because there is a general feeling of tolerance toward insurance crime, saying that "the public tends to view fraud as a harmless prank pulled on massive corporations."
Insurance fraud - constituting an $80 billion-per-year epidemic already - only drives up costs for all policyholders.
"Fraud is a large drain on insurance companies. Much of it gets passed on to the consumer, which in turn makes people angry at the insurance companies," Quiggle said, saying that insurance companies should be doing a "much better job of educating the public of the costs of fraud."
In the meantime, back in New Hampshire, Heidi Jordan, a Senior Special Agent at the National Insurance Crime Bureau (NICB), Area 9 (which includes New Hampshire), is on the front lines of a growing battle against owners looking to rid themselves of burdensome vehicles and against nefarious opportunists looking to make a quick buck.
The National Insurance Crime Bureau, founded in 1992, is a non-profit organization sponsored by more than 1,000 insurance companies that employs more than 150 field agents like Heidi Jordan. The organization works closely with law enforcement agencies and Insurance Department investigators, providing both investigation service and educational programs to help clients fully understand the tactics of both amateur and professional perpetrators of insurance fraud.
By far the largest form of vehicle fraud to come from the economic downturn, vehicle give-ups are steadily increasing and will continue to do so until the economy pulls out of its current slump, says Jordan.
Owners often believe that they can get away with destroying a vehicle and reporting it stolen to retrieve the insurance money, but with new technology and techniques, investigators are catching on.
"They [owners] will try to destroy any ability to identify a vehicle, but we have several methods of finding out where the vehicle came from," Jordan said. "For example, we have experts that we can call that can tell us if a vehicle was last started with a key, which would often rule out theft."
Aside from flat-out dumping vehicles, some desperate owners seek out auto-theft rings which will take the vehicle and then re-sell the vehicle to innocent consumers.
Also on the rise are fraudulent filings for New Hampshire insurance policies. In these cases, residents of Massachusetts cross the border to sign-up for New Hampshire insurance policies, which generally offer far lower premiums.
"It misrepresents the risks that the insurance companies face," said Jordan. "And it’s illegal."
Post-Accident Insurance Policies
E-commerce makes it easier for another type of insurance fraud which, according to Catherine Tucker, has resulted in several successful prosecutions.
In New Hampshire, auto insurance is not mandatory and many drivers remain uninsured. Some uninsured drivers, after having an accident, will contact an online insurance company – which often has lax policies on inspecting vehicles before coverage is provided – and claim that the accident occurred after the purchase of the insurance policy.
"The Insurance Department has had a lot of recent success in prosecuting cases like this," Jordan said.
There are many means and methods that agencies use to identify fraud, but they are closely held in order to ensure their effectiveness. However, once the red flags are seen, law enforcement and insurance company officials will report the incident to the Insurance Department. If there is enough evidence, Catherine Tucker will pursue prosecution.
Lately, says Tucker, there has been plenty of such evidence.