Typhoons and Opportunistic Fraud: Claim Patterns of Automobile Theft Insurance in Taiwan

Typhoons and Opportunistic Fraud: Claim Patterns of Automobile Theft Insurance in Taiwan

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Article ID: iaor201522185
Volume: 81
Issue: 1
Start Page Number: 91
End Page Number: 112
Publication Date: Mar 2014
Journal: Journal of Risk and Insurance
Authors: , ,
Keywords: automobile industry, insurance, Taiwan, fraud, hurricanes and typhoons
Abstract:

We present evidence to support the existence of opportunistic fraud in the automobile theft insurance market in Taiwan. After encountering a typhoon hit, the insured who purchase automobile theft insurance but do not purchase typhoon/flood insurance tend to have a significantly higher probability of filing a total theft claim than other insured. The above relationship exists mainly in places affected by typhoons. Such evidence does not exist in partial theft claim. These claim patterns of automobile theft insurance provide us with strong evidence that supports the existence of opportunistic fraud in the market.

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