IASIU Recap: The Rocky Road of Auto Theft

For the insurer and the owner of a vehicle involved in a “rock rental,” parting is sweet sorrow indeed. This type of loss, which is also called a “drug give-up,” refers to the growing incidence of insured drivers who relinquish their automobiles in lieu of monetary payment for illegal substances, usually crack cocaine.

As Roy Mura, Esq., Mura & Storm, PLLC, explained in today's International Association of Special Investigation Units' session titled “Investigating the 'Crack Ride' Loss — A Claim Study,” the person borrowing the vehicle in question is usually a small-time drug dealer who may otherwise lack transportation. The dealer in this case may use the car to run personal errands and then not return it to the owner. When and if the automobile is delivered back to the owner, it may be in a state of disarray, often having been vandalized to some extent.

Subsequently, the insured/drug user in such a scenario will file a claim alleging theft. Insurers are then confronted with the arduous task of determining coverage and if an auto theft has in fact occurred — as defined by policy limits, if not in the traditional sense.

“This loss type has become more prevalent in past seven years in the auto insurance industry,” said Mura. “It definitely presents unique challenges to special investigations.”

Mura offered advice and explored some of the underlying psychological and socioeconomic factors behind the phenomena while helping investigators become more attuned to the NICB common indicators of crack ride losses so that they know what to look for and what type of evidence to collect.

“In theory, investigators will share this knowledge with claim staffers, who can then make educated coverage decisions and will ultimately decide to either grant benefits or deny them,” said Mura.

Insurers were urged to examine suspicious cases and to be cognizant of the notable distinction between voluntary parting and actual theft. The session included a thorough discussion of an academic article recently published by a group of university professors. Based on a string of thefts in Birmingham, Ala., the study identified common terms between these loan and loanees and found that more than half of the cars reported stolen in that area at that time could actually be dubbed “rock rentals.”