Premium
Typhoons and Opportunistic Fraud: Claim Patterns of Automobile Theft Insurance in Taiwan
Author(s) -
Pao TsungI,
Tzeng Larry Y.,
Wang Kili C.
Publication year - 2014
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/j.1539-6975.2012.01498.x
Subject(s) - insurance fraud , automobile insurance , typhoon , business , property insurance , actuarial science , insurance policy , casualty insurance , geography , meteorology
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.