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Dirty little insurance secrets

By Jay MacDonald · Bankrate.com
Friday, November 12, 2010
Posted: 10 am ET

Susanna Hoffs of the Bangles with her Rickenbacker 350SH. (Courtesy Rickenbacker)

True story: A musician friend of mine once had a beautiful Rickenbacker electric guitar stolen from his home. When he called his agent to make a home insurance claim, the agent took down the details, then added, "And you lost a TV, too."

"A TV?" my friend asked.

"Yes," the agent said. "That $250 TV." Which happened to be the exact amount of my friend's deductible.

We sense two things about this scenario: 1) it's insurance fraud, and 2) it probably happens all the time.

Was the agent wrong to help out a starving musician? Was the musician wrong to allow his agent to pull one over on his home insurance company?

A new survey by Accenture sheds a bit of light on how Americans view insurance fraud today. The general consensus is that hard times lead more people to bend the rules when it comes to home insurance and auto insurance.

According to a survey of 1,000 consumers, more than three quarters (76 percent) said that people are more likely to commit insurance fraud during an economic downturn than they are in more normal times, up from 66 percent in those more normal days of 2003.

Asked the reasons behind insurance fraud, 60 percent said people need the money, 42 percent said people feel they pay too much for home insurance and auto insurance, and 33 percent said (power chord strum) that people commit fraud to recoup their deductible.

Interestingly, 1 in 10 respondents (11 percent) knew someone who had inflated a home insurance or auto insurance claim. The proportion of respondents who knew a claim inflator was highest among the wealthy (19 percent with incomes above $100,000) and the young (19 percent among respondents age 18-24).

What's your take? Have you -- or would you -- knowingly inflate a claim on your home insurance or auto insurance, say to cover the deductible? Or would you just keep rockin'?

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