Premiums hike as insurance fraud increases

By Cecilia Park

The prosecution said Wednesday that it has arrested a former manager of a popular singer for insurance fraud involving 270 million won.

Seo, 41, was charged for allegedly causing 11 intentional accidents from March 2010 to November 2011 with expensive imported cars including Mercedes ‘Maybach’ and BMW from a 38-year-old pop singer’s agency for insurance money, said a spokesperson of Seoul Southern District Prosecutor's Office.

A 30-year-old actor, identified Ji in family name and seven others who were involved in the crime will also be charged without detention, he added.

As their crime so-called 'a collection of new insurance frauds with imported cars' indicates, they used expensive foreign sedans such as 335 million won Mercedes 'S600L Designo,' which was the most expensive vehicle used for insurance fraud, according to a spokesperson of the insurance company initialed S.

They also played with the insurance system, the prosecution said. “Knowing that insurance firms consider the entire car as broken when the bottom part is damaged, they hit precast pavers and underground parking lot walls to receive more money than the cost of repair.”

Seo also asked mimic-singer Kim, 38, in 2010 to hit a retaining wall several times with the Mercedes and then pretended as if Kim was an inexperienced driver, and got 34 million won.

A new actor Kang,32, hit Maserati that Seo was on so that Seo could get 20 million won in February of last year.

Four months later, Lee,40, former classmate of Seo, struck the backside of Seo's Mercedes with his BMW in June in Namyangju, Gyeonggi Province, according to the prosecution. But Seo told the insurer that he got in an accident when dodging a wild animal which appeared suddenly, and received 70 million won.

Investigation agencies and insurance firms are having difficulties in finding fraud ever since they became more skilled and use expensive imported cars like Seo did. A spokesperson of an insurance firm said, "Only 10 percent of suspected car insurance frauds are confirmed."

As many as 12.4 percent of the total claim settlements are assumed to be fraud in which 60 percent of it involve vehicles, according to the Financial Supervisory Service. "Increase in insurance fraud is causing a citizen to pay 7,0000 won more for the insurance," said a spokesperson of an insurance company.