Brown insured his automobile against theft under a policy of insurance.Shortly after he had insured the vehicle,he found himself short of cash,and offered to sell the vehicle to his friend for $500 if his friend would dismantle it for parts.Brown did not tell his friend that he intended to claim that the car had been stolen.His friend bought the car for $500,and dismantled it.
-Brown's actions in this case would constitute a fraud on the insurer if he claimed that the automobile had been stolen.

Question

Quizplus · Accepted Answer

Brown's actions of selling the car to his friend for parts and then claiming it as stolen would be considered a fraudulent act as he had already disposed off the vehicle and intended to deceive the insurer into paying for the loss.

Brown Insured His Automobile Against Theft Under a Policy of Insurance.Shortly