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Filing false Insurance Claim Proves to be a Costly Mistake in New Jersey

December 28, 2011

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In <em>Carbo v. Allstate Property &amp; Casualty</em>, plaintiff filed a motor vehicle claim with Allstate claiming he was carjacked after returning from using a bathroom at a nearby restaurant.  Plaintiff further claimed that he called 9-1-1, flagged down passing police officers and eventually found the car damaged five miles away.  Allstate investigated the claim and after an examination under oath, disclaimed coverage on the basis that plaintiff made material misrepresentations and concealments, and that the evidence indicated that the vehicle had not been stolen as reported.  Plaintiff filed suit seeking $15,000 in damages.  Allstate answered and counterclaimed that plaintiff violated the New Jersey Fraud Prevention Act.  After a three-day trial, the court found that plaintiff failed to file a stolen vehicle report, failed to identify the restaurant where he stopped to use the bathroom, and his cell phone records did not reflect any 9-1-1 calls at the time of the alleged theft.  The court awarded judgment to Allstate of "no cause of action," and found that plaintiff violated the New Jersey Fraud Prevention act.  The court also ordered plaintiff to pay $17,838,39 in attorney fees and costs to Allstate.
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Thanks to Andrew Marra for his contribution to this post.


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