Las Vegas NowOwners Torching Cars to Collect Insurance

Owners Torching Cars to Collect Insurance

You might be playing by the rules, but hundreds of Las Vegas residents are filing false insurance claims in hopes of cashing in. With the downturn in the economy, insurance fraud is a bigger problem than ever and you are paying the price.

Residents may be willing to walk away from their homes, but many are not willing to walk away from their cars without some sort of pay out. Instead, they're taking their cars to the desert and torching them, and then claiming they were stolen.   

Thanks to insurance, in some cases, they walk away with no more car payments, but you are left picking up the slack.

"Most people can't afford the car payment. A lot of it is the nature of cars. A lot of negative equity is built into cars and they just feel like they can't afford that payment anymore," said Brian Kunzi with the Nevada Attorney General's Division of Insurance Fraud.

Kunzi says on average, the AG's Office sees four to five intentional car blazes a year. In the last six months, they've seen more than 50 -- all of them filing false insurance claims.

Robert Feldman, President of Nevada General Insurance, says insurance companies have no choice but to pass their financial loss along. "The more money that is paid out in claims, the rates pass on to the consumer," he said.

But it's not just car fires. The state has seen some home arson cases as well. Feldman says minor injury claims are the biggest problem and Nevada has double the national average. "Either there are an abundance of lawyers and chiropractors in southern Nevada, or we have extra weak necks and backs here because we have double the average of claims," he said.

Average consumers like Nick Oyola are left to pick up the slack with higher insurance rates. "It is expensive. I'm a single guy with a 10-year-old car and I pay $150 a month. That's crazy. I don't know about you, but with no accidents or anything, does that seem right?" he said.

The AG's Office has been pursuing this type of fraud more aggressively. In the last few months, they have managed to save more than $1 million worth of false insurance claims.