Some cars left in Gustav's path may be insurance fraud scheme

McClatchy Newspapers (MCT) - If you live in an area that rarely floods, what's your new sport-utility vehicle doing parked on the beach during a monster hurricane?

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Dozens of relatively new cars, trucks and SUVs were conspicuously abandoned in some strange places as Gustav rolled through the Gulf Coast, and investigators said many of these cases have insurance fraud written all over them.

Several car owners drove their vehicles as close to the beach as possible and then bailed out.

Investigators said owners who may have bitten off more than they can chew in monthly car payments often look for an easy way out of car debt.

In Gulfport, Miss., several cars were left near the Ken Combs Pier and others were abandoned near the Island View Casino. One was left at the Pass Christian Harbor and others in random spots along the Coast.

It's possible some of the vehicles were disabled and couldn't be moved, but that wasn't the case at the Pascagoula Yacht Club, said Rocky Bond, a longtime member.

"It was kind of odd that everybody was headed out of there and here comes this young girl," Bond said.

It was late Sunday afternoon, the wind was beginning to pick up and time was running out, Bond said, when a "fairly new" car pulled into the parking lot and stopped just a few feet from the water's edge.

"She comes in the parking lot and hops out of her car and gets into an SUV and drives off," he said. "She parked about three spaces from the dock and that area floods in small rainstorms, so we knew it was going to flood that car."

With gas prices soaring and values of gas-guzzling vehicles declining, the National Insurance Crime Bureau says auto-insurance fraud is on the rise.

"If that vehicle is registered somewhere outside the zone, somewhere farther north, then the first question is going to be how is it that the vehicle ended up next to a boat launch on the Mississippi Sound?" said Frank Scafidi, spokesman for the insurance crime bureau in Sacramento, Calif.

Unlike homeowner policies, insurance policies for automobiles cover flooding, state Deputy Insurance Commissioner Lee Harrell said. Insurance companies usually investigate suspicious claims before paying them.

"Generally, people when they evacuate take their vehicles with them," Harrell said. "But if you live in one place and your vehicle is in another, that's a suspicious claim."

Insurance fraud is a felony, punishable by up to three years in prison and fine of as much as $5,000 or double the value of the fraud, whichever is more.

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On Monday, Bond watched from a friend's house nearby on Washington Avenue as the car abandoned at the Yacht Club bounced around in the angry waves.

Bond has been a Yacht Club member for years and he did not recognize the young woman as a fellow member. Another member knew someone who owns a towing company and Bond said when the license plates were run, the car came back registered to an address in northern Jackson County, Miss.

"People will do this and then we wonder why everybody's insurance is so high," Scafidi said. "Well, it's because we're subsidizing these kinds of knuckleheads."

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(Staff writer Anita Lee contributed to this report.)

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© 2008, The Sun Herald (Biloxi, Miss.).