Have you ever heard of Andy House or Ted Lilly? You may have heard of Ted Lilly if you follow baseball closely but most people may not recognize Andy House’s name. Here’s a clue, they have something in common, and it’s not sports, the schools they attended, or where they were born. Still not sure? The answer is they both committed insurance fraud with their vehicles.
Andy House made the news when he drove a Bugatti Veyron into Gulf Bay near La Marque, Texas in 2009. He had purchased the Bugatti for $1 million and had it insured for $2.2 million. House claimed he was distracted by a pelican and his cell phone which caused him to drive into the bay. After exiting the Veyron, he left the engine running for 15 minutes so it would suck salt water into the engine and destroy it.
Unfortunately for House, a driver videoed him driving the Bugatti into the bay. No pelican, or any other bird for that matter, appears in the video. In addition, the video shows House never attempted to brake the car before entering the water. The video “captured” an expensive, beautiful car being driven purposely into the bay providing an excellent example of insurance fraud.
Ted Lilly’s case, while not as dramatic as purposely wrecking a million dollar car, also provides an example of insurance fraud. He had an accident in his RV, but wasn’t carrying insurance at the time of the accident. He took the RV to a repair shop to obtain an estimate for the repairs on March 19, 2014. He then bought an insurance policy on the RV on March 24th and followed that with a claim on March 28th. Progressive figured it out.
Insurance fraud is an act that’s committed with the intent to obtain a fraudulent outcome from an insurance process. Car insurance fraud includes deliberately wrecking a vehicle, setting it on fire, attempting to mislead an insurance company on when an accident occurred after you purchased insurance, pulling in front of someone and then slamming on your brakes so they rear end you, and more.
It’s an easy problem to ignore and say it doesn’t impact you because you’d never attempt to commit insurance fraud. Other people may be tempted to shrug their shoulders or laugh at it thinking that someone’s just getting the insurance company back. What neither group realizes is insurance fraud impacts all of us. It’s estimated that insurance companies are defrauded of at least $80 billion annually. Ultimately, each of us pays for this through higher premiums, and in some cases, people are injured or killed in staged crashes.
Insurance fraud is also a crime. Ted Lilly accepted a plea deal with a California court and will pay a $2,500 fine, serve two years of informal probation, and perform 250 hours of local community service. Andy House’s fate is still up in the air. His sentencing was postponed in June of this year, but he could serve up to 20 years in prison for his fraud. In both cases, I’m reminded that crime and insurance fraud don’t pay.
What do you think should be done about insurance fraud? Share your thoughts, questions, and experiences with me on my Google +, Facebook, and LinkedIn pages. I’d love to hear from you.