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Car Insurance

A Blog About Driving and Car Insurance in the USA

Monday, May 22, 2006

Twentynine Palms, California Man Tries To Fool His Car Insurance Company, Gets Caught, and Now Faces Prison Time and A Hefty Fine

Have you ever let your insurance policy expire, then renewed it a few weeks later when your financial situation improved? It's a game that no one should play, because it's illegal to drive without liability insurance in most states, and, if you get into a serious accident during an insurance lapse, the legal, financial and personal hassles can be truly overwhelming.

Back in October of last year, 32-year-old Jacob Leatherberry got into an accident as an uninsured driver: Leatherberry had let his Progressive insurance policy expire. Then, right after his car accident, he called Progressive to renew. When the Progressive insurance agent asked Leatherberry if he had been in a car accident in the past 3 years, Leatherberry answered, "no."

An hour later--with his auto insurance policy renewed--Leatherberry called Progressive to inform them that he had just gotten into a car accident. Oops! That's insurance fraud!

When asked if he had been in a car accident in the last 3 years, Mr. Leatherberry should have answered, "yes." That would have been the right thing to do: at best, he would have received a new policy with a premium commensurate with his recent driving history; at worst, Progressive would have elected to pass on renewing his policy.

Now Leatherberry may have to spend 5 years in prison and pay a $150,000 fine. Yikes!

Fooling around with the insurance companies isn't worth it. The insurance companies have deep pockets, and that means they have the will and the resources to pursue insurance cheats.

Additional details can be found below in the snippet from today's press release:

"Insurance Commissioner John Garamendi announced today the arrest of Jacob Leatherberry, 32, at his home in the City of Twentynine Palms. Leatherberry, charged with three felony counts of insurance fraud related to a 2005 auto accident, was booked into the Morongo Valley jail with bail set at $25,000.

Leatherberry was arrested on May 10 by a detective from the Twentynine Palms Police Department and arraigned on May 12. Prosecution is being handled by the San Bernardino County District Attorney’s office, if found guilty Leatherberry could face up to five years in prison and be forced to pay a $150,000 fine.

'Auto insurance fraud takes money out of honest drivers’ pockets by raising our premiums,' said Insurance Commissioner John Garamendi. 'We will continue our mission to fight this costly crime and help keep insurance affordable for all Californians.'

According to California Department of Insurance (CDI) investigators, on October 21, 2005, Leatherberry was involved in an automobile accident in the city of Twentynine Palms. Almost one and a half hours later, he called Progressive Insurance and paid off the balance of his lapsed insurance policy--a requirement he had to fulfill before he could purchase a new policy with Progressive. Then, while Leatherberry was purchasing a new policy with Progressive, he was asked if he was involved in any collisions in the past three years. Leatherberry replied no. He then obtained a new insurance policy that went into effect on the evening of October 21, 2005. One hour later, he called Progressive to report he had been in an auto accident.

Leatherberry later admitted to CDI investigators that he purchased the insurance policy after the collision occurred.

According to Progressive, Leatherberry’s truck was a total loss. Investigators estimate that if the claim had been paid, it would have cost the insurance carrier $8,000 to $10,000. Progressive provided valuable assistance during the course of this investigation."

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