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They're called owner "give-ups," and their rise is a sign of the tough economic times. Despondent over being financially strapped and unable to cover car payments, vehicle owners are ditching, sinking, or torching their vehicles and reporting the loss to collect insurance payoffs. According to authorities, most of the titleholders aren't seasoned criminals. In fact, many of the false claims are filed by first-time offenders -- people who normally wouldn't steal a piece of candy from a store. However, the desperate owners see insurance companies as "rich and fat," says James Quiggle, a spokesman for the Coalition Against Insurance Fraud. Many think the insurance companies won't miss a few dollars.

Well, of course they will. Owner "give-up" cases result in felony charges of insurance fraud, making false statements to police and insurance providers, and arson if the car was burned. A better solution for cash-strapped owners, say experts, is to attempt to renegotiate payments, sell the car, or trade it in for a less expensive model. While you generally won't come out ahead, those transactions are legal and they'll keep you out of the slammer.

[Source: Detroit News | Image Source: Mark Dadswell/Getty]


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  • 22 Comments
      • 5 Years Ago
      Is that an E38 7-Series?
      • 5 Years Ago
      *sarcasm*

      But I keep getting told the recession is over.

      If times are really that bad for you, why not just forfeit (repo?) the car to the lien holder. I have never had to have a car repo'ed, so I don't know how that works.

      Sure you will have a repo on your credit, but that is better than insurance fraud (which the investigators will probably figure out). The bank might even work with you and put your loan in forbearance for a few months.
      • 5 Years Ago
      Idiots who pull this crap should be dealt with in the harshest possible manner and given the maximum penalty.

      "A better solution for cash-strapped owners, say experts, is to attempt to renegotiate payments, sell the car, or trade it in for a less expensive model."

      Yea, and here's another novel idea - don't buy your car with credit. If you pay cash, you will never have to worry about any of this. That's freedom.
      • 5 Years Ago
      Or, you can just crash the car. Sure, it's your fault and your rates might go up, but if you really have to get money out of your car, it's a surefire non-fraud way to go. Unlike torching or reporting it stolen, there is no lie if you actually have crashed the car yourself. Find a nice tree and say you lost control. Make sure to hit it hard enough to damage the frame or something else that will be sure to total the car.

      If the car books for more than you can sell it for, crashing it might just be the way to go. If you don't have any other blips on your driving record like speeding tickets or prior wrecks, the nominal increase in your rates for a first-time collision probably would still have you coming out on top.
        • 5 Years Ago
        Forensics can figure out within hours if you really lost control or not.
        • 5 Years Ago
        Lets see forensics prove that you didn't fall asleep at the wheel. Head out on a Sunday night late and run off the road into something. They going to consider that insurance fraud as well? I am by no means encouraging you to do something to fix YOUR situation by raising MY rates, it was purely for arguments sake.
      • 5 Years Ago
      Wouldn't a better alternative is to leave the car with the windows open and the keys inside in or near some tough neighborhood over the weekend then wait for it to be stolen and claim the insurance without any fear of being accused of insurance scam?

      On another note, given that many people owe more on their cars than it is worth (upside-down) perhaps someone who attempts this will find out that his insurance check (replacement cost) will not cover the amount owed to the financing company....
        • 5 Years Ago
        those are called bait cars, and you would be surprised how often people in the "ghetto" are wise to that type of stuff and will leave it alone.

        I hate medical insurance a lot more than car insurance. Car insurance wise I pay 1800/year (im 27, male, clean record except for speeding) and that is for over the top full coverage on a 08 Z06, and liability on a S10)

        it's a smaller company and they have always paid any claim I've ever had.

        Here is a novel ideal, it won't be adopted because it's too logical, but the reason some peoples rates are so high is because as a society we have agreed to carry the slack of all the idiots that get behind a wheel drunk, or stones, or what have you. The problem people's mistakes are spread over all of us. I understand the concept of insurance, but there has to be a limit. I think if you kill someone with your car, drive drunk, or do one of those REALLY REALLY bad things, you should be dropped from all insurance, and license revoked. That way society isnt going to carry around your ass and pay for your mistakes.
        • 5 Years Ago
        Jeff,

        Dropping people from insurance won't work. They will just drive without insurance and our rider for "uninsured motorists" will increase thus negating any benefit from a drop in the liability portion.

        Best solution is to add a tax per gallon of fuel to pay basic insurance coverage for all. That way you are paying proportionally to how much you drive (the introduction of electric cars may change that but it will be a while) and everyone at least have basic insurance while you may add to that with more coverage from private companies as you do it now.
      • 5 Years Ago
      And to follow up on DjDATZ most recent comment, insurance companies face very tough regulations that vary from state to state.

      This is an instance where the free market works pretty well. There is intense competition between insurance companies to find the lowest rate for a person according to their calculated risk. Granted, your rate may not always seem fair but I can assure you there is mountains of data that can back up your rate.

      Just remember, you're paying them to take on your risk. Do you prefer to pay $1000-2000 a year or in a worst case scenario be on the hook for $300,000+ medical payments if you cream somebody?

      And if I sound like a shill, some of you are probably contributing to my paycheck ;)
      • 5 Years Ago
      In other news... the sky appears to be blue.
      • 5 Years Ago
      And you jerk-offs are causing my rates to increase to cover for your dumb ass!
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