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Auto insurance fraud said to be on the rise in California

Posted On Thu, August 27, 2009

A difficult financial climate is leading to an upswing in auto insurance fraud, which can drive up rates for consumers everywhere.

One state that has seen an increase in such activity is California, where Insurance Commissioner Steve Poizner recently announced that there was a 31 percent increase in suspected arson fraud cases in 2008 compared to 2007. Arson fraud typically occurs when a person wants to avoid their vehicle payments and cash in an insurance policy, so they proceed to report it stolen.

Overall cases of suspected insurance fraud involving phony vehicle theft was also up significantly in 2008 compared to the previous year.

"Many Californians are facing a host of financial challenges in today's economy, but I want to remind everybody that you will only compound your problems if you break the law and commit fraud in search of a quick fix," said Poizner.

California is not the only state that has seen an increase in such crimes, with many others having also experienced this trend in light of the economy. However, as authorities detect and prosecute such crimes, it helps hold down auto insurance rates for others.

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