A woman parked her late-model car just feet from the stormy GulfCoast waters by Gulfport, Miss. as Hurricane Gustav closed in. Shejumped into a waiting vehicle and zoomed off, leaving her car tothe mercy of the raging wind and surging ocean.

Paula Parent allegedly sunk her 2005 Chevy Trailblazer in LakeErie for insurance money in June 2008. According to investigators,the keys were still in the ignition, and a rock was tied to the gaspedal. The Buffalo-area woman later admitted that she wanted to buya vehicle with better mileage.

Helen Marler, a Yuba County, Calif. resident, torched her JeepLiberty to escape the $600 monthly payments, while her husbandplunked his Nissan Titan into a river to collect a $29,000insurance policy, prosecutors say.

As America's economy sinks deeper into a trough, growing numbersof anxious drivers are illegally dumping unwanted vehicles in thehope that insurance payouts will help relieve the financialmisery.

Gas prices have surged, and credit has been perhaps all tooreadily extended. The nation's sudden financial downturn hascreated a perfect storm of economic stress. People cannot affordvehicles that have suddenly grown too expensive, and their personalfinances take a beating. Other economy-driven problems, such asuntenable mortgages, may lead some to seek insurance money to easethe pinch.

Parting Is Sweet Sorrow

So-called vehicle give-ups have long been a common insurancecrime. When a vehicle becomes too expensive or burdensome, a drivermay torch it, drown it in a lake or a river, or simply abandon itin a remote location. The driver then tells the insurer thatsomeone stole the doomed vehicle, demanding an insurance payout.Unfortunately, rapidly spreading warning signals suggest that thisscheme may be spreading.

“Spikes in people dumping their vehicles are the norm in aneconomic downturn,” said Douglas Ashbridge, director of specialinvestigations for Farmers Insurance Group. “The vehicles are easyto report stolen, and the fraud is more difficult to verify. It's away out, a way to get out from under vehicle payments and let theinsurance company pay off the loan.”

The Coalition Against Insurance Fraud (CAIF) investigated nearlya dozen locales around the U.S. in the late summer and early fallof 2008. The data gathered are usually anecdotal and suggestive butdo reveal warning signals. As Ashbridge put it, “We're seeing moregive-ups pretty much across the board.”

In New York, arrests for owner give-ups have soared 25 percentin 2008 compared to the previous year, according to the state'sinsurance department. The department logged 101 busts for all of2007, but had recorded 93 cases by August 2008. Most of the bustshappened in New York City, including nearly two dozen that involvedgas-gobbling SUVs.

“Owners are giving up their vehicles due to high leases, theeconomy, and prices of gasoline,” says Frank Orlando, head of theNew York Fraud Bureau. “Some are high-end vehicles that are costlyto maintain.”

This problem persists in other states as well. For instance, inNew Jersey, suspected vehicle arsons have risen steadily. The statefire marshal recorded 59 possible torchings in 2004; 76 in 2005;and 94 in 2007.

“Fraud investigators noticed a spike in suspected auto give-upsthis past summer, though firm statistics still are being compiled,”says John Butchko, special assistant with the state attorneygeneral's office. “We're seeing the troubling signs of an increasein suspicious claims, which have especially been trending towardthe larger, low-mileage vehicles.”

In Ohio, the state fire marshal recorded 3,168 vehicle arsonslast year, which represented a 10 percent increase from the 2,872reported in 2006. According to Columbus' arson division, vehiclefires rose from 140 in 2005 to 202 in 2006, the year the subprimemortgage crisis first began exploding.

“I'm sure more give-ups are coming,” says Michelle Brugh, headof Ohio's Insurance Fraud Bureau. “I wouldn't be surprised, sowe're taking a proactive approach.”

In Mississippi, police have unearthed dozens of vehiclessuspiciously abandoned on piers, beaches, and other places nearseashores, where surging waters and high winds from HurricaneGustav could easily wreck them.

In California, the state fraud bureau reported that insurersreferred 40 percent more suspected give-ups to the state'sinsurance department during the 2008 fiscal year — which ended June30, 2008 — than the previous year. California also had a jarring5.4 percent unemployment rate in 2007, according to federalfigures. In addition, RealtyTrac reports that the state rankedsecond in the nation for foreclosures through August 2008.

Cases in San Bernardino County and San Joaquin Valley also haveincreased in recent months, according to news reports. In FresnoCounty, prosecutors charge that 12 people ran an insurance fraudring that burned vehicles for clients.

Actual arrests, however, have remained fairly steady statewide,though investigations often are lengthy and could yield morearrests later, said Dale Banda, former head of the state fraudbureau, who retired this fall.

Meanwhile, mixed messages are flowing from Florida. Recordedvehicle fires have dropped, according to the state fire marshal.Vehicle give-ups also have decreased slightly, according to thestate fraud division's Maj. Jack Kelley. However, local police inMiami also recently told reporters that give-ups were rising intheir city. State Farm said it has noticed a statewide uptick.

“We've seen a substantial increase in vehicle fires in Floridaand New York,” said Dennis Schulkins, claim consultant with StateFarm's investigative unit. “How much you can attribute to arsonsbased on the economy is unclear. Clearly, when there's an economicdownturn, you'll see an increase in opportunistic fraud. I thinkthat's the situation we're in now.”

Utah's Fraud Bureau, which normally has a caseload of one or twosuspected give-ups, is now investigating 30 cases, said JoeChristensen, head of the state fraud bureau. The troubled economy,along with a new state rule requiring insurers to report cases, mayaccount for the spike, he said.

The Arkansas Fraud Bureau is seeing similar trends. It normallyinvestigates a few suspected give-ups each year but logged 18 casesin July and August this past year, including three arsons,according to Cory Cox, director of the unit.

In Nevada, about one in every four cases investigated by anauto-theft task force covering the Las Vegas metro region involvedsuspected owner give-ups.

“Those are picking up,” said Las Vegas Police Lt. Robert DuVall,who is on the city's task force. “The national average is about 18to 20 percent. In my professional opinion, we're a little higherthan the national average. We're seeing more of it as a result ofthe economy.”

Coincidentally or not, the unemployment rate in the Las Vegasarea stood at 7.1 percent through August 2008, which was among theworst rates for metro areas in the U.S.

Lastly, in South Carolina, a survey of insurers conducted by theSouth Carolina News Service indicated that suspected arson schemesof all kinds — including vehicle torchings — rose as much as 200percent from 2006 to 2007. Many dumped vehicles around the UnitedStates are gas-inhaling SUVs, investigators say. Overall, SUVresale values have plunged 50 percent in the last year, which istriple the normal depreciation, according to Kelley Blue Bookprices. Lured by easy credit, drivers often owe more on their loansthan their SUVs are worth in trade-in value.

In fact, the environment for a yet another SUV give-up spike mayalready be emerging. SUV sales are firming up, thanks to recentdrops in gas prices as well as sales incentives averaging around$6,000 as of August 2008. Are yet more overeager drivers buyingmore vehicle than they can afford? How many will want to unloadtheir SUVs if the economy keeps tanking or gas prices skyrocketagain? Only time will tell, but preparation and vigilance can helpmitigate the problem.

Dennis Jay is the executive director at the CoalitionAgainst Insurance Fraud. He may be reached [email protected].