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Auto insurance fraud rises as economy tanks

The number of questionable claims related to possible cases of auto insurance fraud rose dramatically in the past year as the economy continued to tank, according to recent data.

A report by the National Insurance Crime Bureau (NICB) found a significant increase in claims related to what is termed "opportunistic fraud," the nonprofit group said.

The dire economy has placed a particular pressure on the auto industry generally, with new car sales dropping sharply in recent times and leaving the future of American carmakers such as GM and Chrysler in the balance.

Earlier this year, some auto manufacturers sought to reassure consumers afraid of losing their jobs by offering to pay their car loans for a fixed period in the event of unexpected loss of income.

The latest data from the NICB points to the reverse side of the coin: desperate motorists struggling with car repayments apparently taking measures into their own hands.

According to the research, possible cases of auto insurance fraud in suspicious car fires increased in the first quarter of 2009 by 27 percent over the first quarter of 2008. Cases of owner give-ups, in which an owner who cannot afford to make car payments abandons the vehicle, grew by 24 percent.

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