The auto insurance scheme where the insured reports a vehicle stolen to collect on a policy is known as?

• A. Policy dual filing
• B. Premium skim
• C. Inflated commissions
• D. Ditching

Answer: (D)

This is insurance fraud through a staged loss. When someone reports a vehicle stolen to collect the policy payout, the intent is to trigger a payment under the insurance contract by falsely portraying a loss. This particular tactic is known as ditching. It specifically targets the theft claim as the means to gain money from the policy.

The other terms describe different frauds: dual filing means trying to collect from more than one insurer by having multiple policies; premium skim involves pocketing premium money; inflated commissions refer to inflating commission amounts to skim extra funds. None of these describe the act of claiming a car theft to obtain a payout.