Tag Archives: theft

Car Insurance Fraud

The festive season requires extra monies for Christmas gifts and elaborate celebrations. Price hikes intensify in January. School fees, household and vehicle insurance increases. Therefore this makes car insurance fraud attractive to certain types of individuals.

Car insurance fraud is illegal in all 50 states in America. Insurance companies do all they can to investigate and expose car insurance fraud. The following are some ways these scams are committed: –

1. “Owner-give-up”, i. e. vehicle dumping where an owner disposes of the vehicle by leaving it somewhere, dumping it into a lake or river, burying it or even selling it. A claim of theft is then submitted to the insurance company, thus an owner committing car insurance fraud.

When the car is sold before a report of theft is made, the fraudster will claim that the vehicle was stolen and thus obtain funds from the insurance company. Extra monies too from the sale of the original vehicle.

2. Sometimes mechanics use shoddy parts to repair a vehicle. They also  present an over-exaggerated parts and/or labour claim to insurers. Some resort to fabricating the extent of the vehicle damage.

3. Another car repair scam involves the replacement of airbags after an accident. The repairers stuff the compartments with objects with items such as beer cans or pack in peanuts to keep the sensors activated. California passed a protective law against such practices and as a result the guilty party could face a year in prison plus a $5000 fine.

4. Fake traffic deaths or collisions staged by fraud rings may result in false or exaggerated claims. The group may consist of claims adjusters and dishonest officers who create bogus police reports to process claim application.

5. A well-known tactic swindlers use is to drive to a bustling junction or roundabout and apply brakes sharply therefore causing a motorist to collide with the back of the fraudster’s vehicle. Accusations of fast driving or tail-gating is labelled as the reason for the collision.
Claimants may use a “recruited” doctor to diagnose whiplash or other soft-tissue injuries. These are difficult to dispute later.

Many people do not realise that loss indicator insurance agents have “red flags” they look for in possible scams:

– A claimant who is totally unflustered after submitting a large claim.
– Hand-written receipts for repairs on a covered item.
– An insured who increases auto insurance coverage shortly before submitting a claim.

Many insurers have Special Investigation Units. Employees who work in SIUs generally have backgrounds as detectives, police officers and medical personnel. Insurers are now using social media on suspicious claims. Perhaps the claimant who said his car suffered hail damage will be bragging about his deception on Facebook or Twitter.

Car insurance fraud is not just a problem for insurance companies. It is your problem too. According to FBI statistics, non-health insurance fraud costs $40 billion annually, which you cover by paying annual premiums $400 to $700 higher than they would be if there were no fraud at all.

In 1993 The Coalition Against Insurance Fraud was founded. This organisation collects information on insurance fraud. Through its unique work it empowers consumers to fight back. It helps fraud fighters to detect this crime. The Coalition deters more people from committing fraud. It has information, research and data services and insight to help the anti-fraud community.

Bicycle Insurance in South Africa

Most insurance companies require you to insure your bike as part of your household insurance. Other companies offer all-risk cover, but then you are not covered for competition and training with your bike. There are insurance companies who provide policies, which are cyclist and bike specific. They offer stand-alone cover for your bike when you are travelling, riding, hijacked or if your bike is stolen.

Cyclesure

One of the first companies in South Africa to offer and to cover in competition was Cyclesure. The company was started 10 years ago after the founder, Fred Henning realised that cyclists did not have proper cover. He decided to make the difference by offering cyclists stand-alone cover on their bikes and components, whether you are competing, training or commuting. They also provide quick claim resolution and Henning says that 95% of all their claims are resolved within 24 hours of receiving relevant documentation.

Momentum

In 2008 Momentum started offering bike insurance. They decided to get involved in bicycle insurance as they saw a gap in the market. The majority of short-term insurers do not provide stand-alone cover for bicycles; the norm in the industry is that household contents need to be insured as well. There are also companies in the market that exclude accidental damage while training or racing, so they decided to create a policy which is attractive to cyclists.

Miway and Outsurance

Others who offer bike insurance include Miway and Outsurance. Both of these offer similar cover to the abovementioned companies, however they do specify cover in the event of fire damage.

Outsurance

They offer:
Complete Protection
Worldwide coverage
Stand-alone cover
Additional benefits
Personal Accident cover worth R25, 000
Automatic personal legal liability up to 5 million

You are protected against:
All Risk
Loss or damage
Theft
Hijacking
Damage during transit, training or participating.

Miway

They offer:
Worldwide coverage
Stand alone cover
Additional benefits
Personal Accident Cover
You are protected against:
Theft
Hijacking
Fire
Accidental damage
Damage during training, transit or participating.

Cyclesure

They offer:
Standalone cover
International coverage
Additional benefits
Personal legal liability for 1 million rand
Personal accident cover for R10, 000 (applies to official rides only)
Medical expenses up to R5, 000 for any accident (applies to official rides only)
Cover for bicycle hire

You are protected against:
All Risk
Theft
Hijacking
Damage during transit, training or participating

Momentum

They offer:
Worldwide cover
Stand alone cover
Additional Benefits (optional)
Personal Accident cover worth R25, 000 (covers death, permanent or temporary disability)
Personal legal liability worth R5 million (if you insure your household contents with Momentum as well)

You are protected against:
Loss or damage during transit and training
Hijacking
Theft
All risk while participating in an event (no limit)

The four leading bicycling insurance companies quoted to insure an average R10, 000 bike:

Cyclesure

Premium – R73.76 (including the Personal Accident, Medical expenses and R1, 000, 000 liability cover)

Excesses:
Basic – 5% of claim minimum R250.00
Theft and hijack – 10% of claim
All wheel claims – 10% of claim

Miway

Premium – R70.00 (depending on the underwriting information)

Excess – R400.00

Momentum

Because they individually write each risk (client) premiums and excesses vary from one person to the next, regardless of the cost of the bike.

The information used to calculate the risk:
1. Client’s ITC profile (i. e. credit score)
2. Current insurance history
3. Area the client lives in
4. Previous incidents and cancellations
5. Type of bicycle i. e. mountain vs road bike
6. Value of the bicycle

This is the possible cost of cover with Momentum, based on a fiction client.

Premium – R123
R103 (single speed)
R98 (racing)

Excess – R460 (can negotiate a lower excess at additional cost)

Outsurance

Premium – between R250 – R490 +

Excess – R490

Insuring Fine Art

Art Insurance is a slot market with distinctive rules. Insuring fine art is of paramount importance. Transport is the biggest risk and can be reduced by expertly packing and shipping sculptures or paintings. Insurance losses are rare, but expensive, when an insurance policy is to reimburse via opinions of their current market value rather that at a pre-arranged value. The value of works of art have headed up over the past decade. Two paintings by Turner were stolen in 1994 when on loan to Germany. The claim made to Hiscox, a British Museum was for $37 million.

At present, art insurance tends to follow general trends in P & C. (Personal and Commercial). In particular, says Charles Dupplin at Hiscox, the rates for transits between museums are going up. Transporting works of art across countries and continents is still a risky undertaking. Standards of safety and care vary considerably, say, between America and the former
soviet Block.

The two paintings Shade and Darkness – the Evening of the Deluge and Light and Colour (Goethe’s Theory) – The Morning after the Deluge – Moses writing the Book of Genesis are two of Turner’s most significant works. Shades and Darkness was recovered on 19th July 2000 but no announcement was made for fear it might jeopardize the recovery of the second painting. Light and Colour was recovered on 16th December 2002.

The Mona Lisa was stolen from The Louvre on 21st August, 1911. The Louvre closed for an entire week to aid in the investigation of the theft. It was recovered in 1913 after the thief Vincenzo Peruggia attempted to sell it. Currently The Mona Lisa is estimated to be worth $743, 000, 000 although art critics say it is priceless.
The Boy in Red Vest by Paul Cezanne was stolen from Foundation E. G. Buhrle in Zurich valued at $91, 000, 000 and recovered in Serbia on 12th April, 2012. These are only some of the famous paintings stolen over the years.

If you own fine art, and want to insure the collection, the first task is to create detailed records of your art collection. The name of the artist, title, date that the work was created, the medium used (oils, acrylics etc), its size and general condition. Keeping original receipts for art works purchased is also prudent. Taking photographs is advisable, which should be kept in a safe place.

Certain insurance companies that specialise in fine art insurance may send a specialist to evaluate the collection and at the same time give advice on the protection of the various pieces from light, fire and water spoilage. Any fading or cracking that may be caused by artificial light or natural light will not be covered in this policy. It is necessary to take extra precautions if you live in an area which is susceptible to hurricanes and earthquakes. Wall-hanging devices such as special earthquake hooks should be used to secure the art on walls. Three dimensional works of art like big sculptures should be attached to the floor by means of a heavy base and the use of museum wax will ensure that lighter sculptures will not topple over should you have an incident such as an earthquake or hurricane.

Several years ago, “The Scream” and “Madonna”, two major paintings by Norwegian artist Edvard Munch were stolen from the Munch Museum in broad daylight. An interesting fact that is that Munch had created four versions of “The Scream”.  The one that was stolen was created in 1910 – with tempura on board.  It shows water damage in a lower corner suffered during the ordeal although some art historians view that intrigue as an asset.  The other three versions were two in 1893 and one in pastel in 1895. A Rembrandt and a Vermeer, amongst others, worth approximately $300 million were stolen from a museum in Boston in 1990. In both instances, the art was not insured against theft, although they were insured for fire and water damage as well as reparation costs that may be incurred if the pieces were damaged. John Oyaas, managing director of the Munch Museum said that the Munch paintings were irreplaceable. So what is implied here is that there are paintings that are so valuable, they are not worth insuring. This does not make sense as some insurance is better than no insurance at all. 

The issue is getting compensated in some way if the art is stolen. The cost of insuring an entire collection at a museum may well be prohibitive, however, thieves only steal parts of the collection. If you purchase theft insurance, you are insured for the coverage amount no matter what gets stolen.

One could pay for as much insurance as one can afford. That way, if the art gets stolen, there will at least be some funds to hire top private detectives to try and recover the stolen art, or enough to even pay a ransom amount.
Alternatively, the funds obtained could be used for a state-of-the-art security system which would be a deterrent to future art thieves.

Make sure you understand your insurance policy. Read the fine print and ask every question about every conceivable loss or damage situation that comes to mind. Theft/damage insurance for art added to a homeowner’s policy generally costs $1 – $2 per $1000 of coverage and less if you have a good security system in place. Several insurance companies specialise in covering art and antiques exclusively.

However, additional fine art insurance may cover fire, accidental breakage and loss from severe weather. You may need a separate flood policy to be protected in the event of flooding. Fine art policies can also include transportation coverage. This can be especially beneficial because a significant 5 – 10 percent of art collection claims are as a result of damage or loss to the pieces during transit.