If you’ve never had your car stolen, then you don’t know the sinking feeling that quickly turns to panic when you see your driveway empty when it shouldn’t be, or only scattered broken glass in the spot where you parked your car. With the FBI estimating that a car is stolen every 42.8 seconds, having it happen to you isn’t out of the realm of possibility.
The first thing to do is call the police and file a report, and the second thing to do is call your insurance carrier (well, maybe the third, if you need to cry, stomp your feet, or call your mom first). If you have comprehensive insurance coverage, you can start the claims process for your stolen vehicle right away—if you don’t have comprehensive coverage, you may find yourself with zero compensation for your loss. If that surprises you, and you’d like a plan that would cover you in the event of a theft, we at The Zebra are here for you.
Once you get your agent on the phone, you may be surprised by types of questions they ask you. Some possibilities, according to Rick Lower, director of claims training at Geico, who spoke to CarInsurance.com:
- A description of the vehicle, including its year, make, model and license plate number.
- Information on where and when you last saw your vehicle.
- Whether the vehicle is equipped with a tracking system such as LoJack or OnStar.
- Whether you saw any glass or debris on the ground where your vehicle had been parked.
- Whether you had any personal property in the vehicle.
- The location of all keys to your vehicle.
- Information on your finance or leasing company if your car isn’t paid off.
Your carrier will then look into your financials, your payment and claims history, and even your social media accounts—if it starts to feel like you’re the criminal rather than the victim, you haven’t crossed over to the tin-foil-hat conspiracy dark side: It’s true. The owner of a stolen car is the number one suspect. Insurance companies will rule the owner out as the thief first before making any payments or honoring any claims.
So, are insurance companies being unfair?
Though it may be surprising, the facts actually support the insurance companies’ tactics. The National Insurance Crime Bureau (or NICB—a non-profit that works with law enforcement and insurance companies to root out crime) cites Insurance Industry studies which have found that at least 10 percent of all property and casualty claims are fraudulent.
If you’re curious how someone would go about stealing their own car, the NICB has a rather grim list (from their Vehicle Theft Fraud sheet):
- Owner Give-Ups —The vehicle owner lies about the theft of his vehicle and then orchestrates its destruction to collect insurance money. He claims his vehicle was stolen, but then it is found burned or heavily damaged in a secluded area, submerged in a lake, or in extreme cases, buried underground.
- 30-Day Specials —Owners whose vehicles need extensive repairs oftentimes use the 30-day Special scam. They will report the vehicle stolen and hide it for 30 days — just long enough for the insurance company to settle the claim. Once the claim is paid, the vehicle is often found abandoned.
- Export Fraud —After securing a bank loan for a new vehicle, an owner obtains an insurance policy for it. The owner reports the vehicle stolen to a U.S. law enforcement agency, but in reality it was illegally shipped overseas to be sold on the black market. The owner then collects on the insurance policy, as well as any illegal profits earned through overseas conspirators who sell the vehicle.
- Phantom Vehicles —An individual creates a phony title or registration to secure insurance on a non-existent vehicle. The insured then reports the vehicle stolen before filing a fraudulent insurance claim. Oftentimes antique or luxury vehicles are used in this scheme, since these valuable vehicles produce larger insurance settlements.
Insurance Fraud Red Flags:
The NICB has a list of 23 suspicious behaviors that tip investigators off that fraud may be happening. Some interesting ones:
- High debt or financial distress on the part of a claimant, detected by insurance company investigators through forensic accounting
- Lack of police reports
- Damage or theft of old, obsolete items or inventory, or of multiple family heirlooms for which it’s difficult or impossible to establish accurate value
- A history of losses and prior claims
- A claimant who is unusually calm after a major loss
- Suspicious-looking or handwritten receipts for repairs or replacement of covered property
None of these behaviors prove fraud has been committed–they’re just used to clue companies in to possible shadiness–so don’t worry if some of them apply to you if your car is legitimately stolen.
What can you do?
First—and hopefully this warning is unnecessary—don’t commit insurance fraud! Most insurance companies house Special Investigative Units that work with law enforcement to investigate any suspicious claims, and insurance fraud carries legal consequences throughout the US. And while you may think the insurance companies are the only victims of insurance fraud, it isn’t true: As the NICB reports, we all pay for fraudulent claims. Not directly, of course, but with higher insurance premiums (between $400 and $700 more a year, per family), increased taxes, and inflated prices for cars. It turns out that fraud is second only to tax evasion as the most expensive white-collar crime in America and costs taxpayers as much as $40 billion each year, according to the FBI.
If your car is stolen, be sure to follow all necessary protocol—call the police, your insurer, and your DMV to report the theft. Make note of all crime-scene details (if there is one) and write down all of your recent activities. Be prepared to answer a lot of personal questions, and consider handing over additional material (such as social media account info). The faster your insurance company can rule you out as a fraudster, the faster you can receive your settlement and move on. And, if the pain of a stolen car is more emotional than financial, take heart: Esurance reports that in 2012, 87.8 percent of stolen cars were recovered. We think those are pretty good odds.