How big is the business of insurance fraud? No one can tell for sure. According to US Coalition against Insurance Fraud, insurance scams cost about $80 billion per year. This number does not include the scams that were successful and went unnoticed.
Deteriorating economic situation pushes people to extremes: they have growing debts and no funds to repay them. In their desperation people are trying to seek the exit and insurance fraud is a wrong one.
Below you can find a list of most desperate insurance scams – as entertaining as these examples are, we would like to warn everyone that insurance fraud is a criminal offence.
1. Burn Your House – Get Rich
Two New Zealanders thought they were smarter than the rest of the world – they were not the first and certainly not the last. Angela Dowler received a lease on a house in 2011 and purchased an incredibly expensive insurance plan right away. She was ‘smart’ enough to ask people around her to put the house on fire in exchange for money. Angela went on a trip with her partner in order to secure an alibi, while 18 year old Daniel Waines poured gas onto the property and set it on fire. Firefighters were unable to save the house.
When Angela returned she claimed her house burned and asked for her insurance money. After a thorough police investigation her plot was revealed and she was jailed.
This is one of the most popular kind of insurance fraud in history. A lot of people tried doing it, and the stories even made it into popular culture through various movies. However, the outcome of such stories is almost always the same: the criminals get exposed.
2. Get Rid of Your Car
Some people seem to have no idea when they need to stop getting bank loans since they are unable to repay them. One high school teacher in Houston decided she was tired of repaying her loan on a Chevy Malibu that wasn’t even new. She thought it would be a brilliant idea if some of her failing students torched her car and she would get insurance money. Well, obviously, her plan failed.
Street racers use the same strategy when their cars get destroyed. Street racing is illegal and insurance companies never cover it. That is why ‘smart’ street racers prefer burning their cars in return for easy insurance money. It would probably be more precise to describe it as an easy ticket to jail…
3. Staged Funeral
The is one of the more extreme and entertaining versions of insurance fraud. While some individuals wonder how many people would show up on their funerals, others stage their deaths and funerals to find out. Molly’s husband Clayton Daniels already had troubles with law.
In order to avoid jail time he decided to stage his death and disappear. The couple dug up a grave, put Clayton’s clothes on the body, placed her in their car, put it on fire and drove it off a cliff. Everything went smoothly and people believed them, until the insurance company requested a DNA test.
A lot of people consider insurance scams as some harmless joke and an innocent crime. They paid for their properties for years and think that they are entitled to get insurance money in case it gets destroyed. We’re sorry to let you know that’s not the way it works, and while it is obvious that some people are able to get away with it, most go straight to prison – so was it worth it? Probably not.
Kate Simmons is a freelance journalist and occasional blogger currently working for a site offering various health insurance packages.