However, this is just a dummy loss where there is no loss in a real sense. These acts have negatively affected the performance of many insurance companies. In the current world, these cases have significantly increased. There is an increasing tendency of the insurers to make false claims where the general loss never exists. Over the past, there have been reported some cases where some vehicle owners transfer their vehicles to the neighboring countries just to claim that they have been stolen (Anderson, Stanzler & Masters, 1999). Some of such bogus clients end up convincing the company to cover the loss which never exists. The main aim of such people is to benefit from both the sale of the car as well as the insurance claim. This presents a big danger to the integrity of car insurance companies. It also poses a great threat to the quality of services provided by the insurance companies. In many cases, insurance companies have been forced to pay for dummy losses, a fact which has contributed to an increase in insurance premiums. Another way through which fabricated claims takes place is when the owner of the vehicle parks already damaged the vehicle in a strategic position such that it is convincible that it was caused by a disaster compensating false claims. In such case, it becomes a very difficult for the car insurance company to detect the genuine cases from false claims.
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