The next day she called the Cambridge
Police Department to report the theft of
her car, telling the police she left it parked
on the street in front of her apartment
with the alarm set. When she walked out
to drive to work, her car was missing.
Two bored policemen wrote down the
information she gave. At 10:00 a.m., this
was the fifth auto theft report they had
taken in three hours. There were no suspects and no evidence to follow up. They
gave her a receipt including the report
number so she could give it to her insurance company. She called Big Daddy to
tell him what happened and he sent his
chauffeur to bring her to work. He then
called his insurance broker, who reported
the loss to the insurance company.
The adjuster visited her at the office
and took a brief recorded statement about
the facts. He obtained very little information, unable to concentrate on his work
because of her cleavage.
The adjuster determined the value of
the Mercedes was $90,000. He thought
this would be a simple claim. All he had
to do was fill out two forms, a proof of
loss and a report to the National Insurance Crime Bureau (NICB). Reporting
auto thefts to the NICB was automatic
and computerized. He was sure he would
quickly issue a check for $90,000 so the
young lady could buy a new Mercedes.
The NICB records all stolen vehicles reported to it by its member insurers in its
computers. Because many car thieves take
their vehicles across the border to Mexico,
NICB has agents in Mexico who record license and VIN numbers on any U.S. automobiles they see in Mexico for more than
one day. An agent had spotted the Massachusetts plates on the Mercedes in the
used car dealer’s lot the same morning the
theft was reported to the Cambridge Police. The numbers went into the computer.
When the adjuster reported the theft,
the NICB computer matched his number
with the number recorded by the agent in
Texas. The agent went back to the used
car lot to verify that the car was still there.
It was. He interviewed the dealer and told
him the car had been reported stolen. The
dealer claimed shock. He did not buy sto-
len vehicles. He showed the NICB agent
the ownership certificate signed by the
insured. The agent reported his findings
to the adjuster one day after the proof of
loss was signed and minutes before the
check was to go out in the mail.
The adjuster had a photocopy of the
ownership certificate with the insured’s
signature transferring title to the Mexican
car dealer. The agent and the adjuster vis-
ited the insured at her office. They con-
fronted her with the ownership certificate.
She was too young, too innocent and
not bright enough to lie anymore. The
college boy hadn’t told her what to do
in such a situation. She began to cry and
told the whole story. She agreed to sign a
paper withdrawing her claim and begged
them not to report her to the police.
The adjuster and the NICB agent told
her it was out of their hands. The law
forced them to report her to the Bureau
of Fraudulent Claims. It would be up to
that police agency and the Department of
Insurance to decide whether she should
The Bureau of Fraudulent Claims pre-
sented the case to the District Attorney.
The District Attorney told the investiga-
tors he needed statements taken by police
investigators of the young woman, her
college boy, Big Daddy and the Mexican
car dealer. All of them refused to talk to
the police agents. Big Daddy hired a law-
yer for his administrative assistant. The
same lawyer represented the college boy.
The Mexican car dealer refused to speak
to any American police officer. Big Daddy
would only admit that he had given the
Mercedes to his administrative assistant
as a bonus for her excellent work. Since
the District Attorney could not repeat the
work done by the NICB and the adjuster,
he refused to prosecute.
Big Daddy punished his administrative
assistant. He made her promise she would
never see the college boy again. He made
the college boy give him the $50,000 and
used that money to buy his assistant a less
prestigious $45,000 Cadillac sedan.
Barry Zalma, Esq., CFE, has practiced
law in California for more than 42
years and now serves as an insurance
consultant and expert witness specializing in insurance coverage, insurance
claims handling, insurance bad faith
and insurance fraud. He also serves as
an arbitrator or mediator for insurance
related disputes. Books in the Zalma
Insurance Claims Library, can be
found at www.nationalunderwriter.com/