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.

Top Story

9 ways to recruit and retain Gen Y insurance pros

How to convince millennials that insurance is a rewarding career.

Top Story

The 4 most common business fraud schemes

Sometimes the hardest crimes to see are the ones perpetrated by people we trust.

More Resources

Comments

eNewsletter Sign Up

PropertyCasualty360 Daily eNews

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

Mobile Phone
         
Close

Advertisement. Closing in 15 seconds.