From the December 2011 issue of Claims Magazine •Subscribe!

New Calif. Legislation to Stop Airbag Scams

Law Passed to Increase Pentalty

It is estimated that 4,758 people are alive today because of their airbags, according to the National Highway Traffic Safety Administration (NHTSA).

This important safety feature, however, can’t do any good, if it isn’t there.

California has reported a number of cases where airbags were missing, never replaced after a previous crash, or filled with other material. In 2009, a San Diego couple was awarded $15 million from an auto repair shop after their son was killed in a car accident because of a fraudulent air bag that was filled with paper instead of a new air bag.

Recently, Gov. Jerry Brown signed a bill into law, making it a crime for auto repair shops that claim to have replaced or repaired a deployed airbag when they haven’t. Those caught can be fined $5,000 and sent to prison for a year. The bill officially becomes law on Jan. 1, 2012.

This scam, a profitable one for dealerships and independent repair shops, works in a few ways. Shops can order cheap repair parts online and charge the customer the full price for the airbag, or they could never install the new airbag all the while charging the customer for parts and labor. Replacing airbags is costly; it can run more than $1,000 to install and set up properly.

The NHTSA says the most common reason for a malfunctioning airbag is that it was never replaced after a previous crash.

Comments

Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Union used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.