Torah.org Home Subscribe Services Support Us
 

Hilchos Choshen Mishpat

Volume I : Number 31

Insurance Fraud

Question:

Reuven brought his car into a body shop to be repaired, after it was in a minor accident. Once it was there, the owner of the body shop decided on his own to do some other repair work that was not related to this accident, and was not covered under Reuven's insurance policy, and filed one claim for the entire job.

Is Reuven obligated to reimburse the insurance company for the excess money that they paid to repair the damage that was not covered under his policy?


Answer:

  1. It is absolutely forbidden for a car owner or body shop to file a claim for repair of damages that are not included under the owner's insurance policy.

    Similarly, it is absolutely forbidden to file a claim for damage or theft to a car that was not actually covered at the time that it happened. For example, if a person driving the car at the time of the accident had rented it from the owner, and this is against the terms of his insurance policy, or if someone who did not have a valid drivers license was driving it, or the driver had a learners permit but was not accompanied properly, a claim may not be filed. Additionally, if a policy states that the car must have a working alarm and it doesn't, or that the owner must lock the car to be covered for theft and he does not, no claim may be filed.

    Anyone who collects on a claim in any of the above situations is a thief, and is obligated to return any money collected to the insurance company.

  2. In any of the above situations, it makes no difference if the insurance company is owned (wholly or partially) by Jew or non-Jew. It is also forbidden to collect even if the insurance agent cooperates in filing the false claim, and if collected the payment must be returned.

  3. Regarding our question, the owner of the body shop is obligated to return the money received illegally to repair the extra damage not covered in the policy.

In the event that the owner refuses to repay the insurance company, Reuven would be obligated to pay, but only the amount that he actually benefitted from the additional repair work.

For example, if it was an older car, and with or without the additional repair Reuven would receive the same amount if he would want to sell the car, he would not be obligated to pay the insurance company at all.

However, if the resale value of the car went up $500 because of the additional repair, even if the body shop was paid an additional $2000 for the repair, Reuven must only pay $500.

Similarly, if the insurance company paid the body shop $2000 for this repair, even if this is the actual amount that the resale value went up because of this, but Reuven could have found another body shop that would have done the same repair for him for $500, he is only obligated to reimburse the insurance company $500.


Sources:

The Halachos of theft are stated clearly in the Torah and are elaborated on in the Rambam, and in the Shulchan Oruch (Choshen Mishpat 348 etc.) It is also stated clearly in Choshen Mishpat 348:1 and 359:1 that the prohibition to steal according to the Torah applies equally to Jew and non-Jew. The Shach there (3) states that our situation is considered theft according to all opinions.

Regarding our question, the following issues must be addressed. On the one hand, Reuven did not request that the body shop do the additional repairs. On the other hand, because of the body shop owner's actions, a false claim was filed on Reuven's behalf, and Reuven did receive from the insurance company the benefit of an increase in the value of his car. In this situation, Reuven is only obligated to pay the amount that he would have had to pay to receive this additional benefit. This is the Halacha that we find in Bava Metzia 101a regarding a gardener who enters someone else's field without permission and plants and otherwise improves the field, that the owner is only obligated to pay the actual amount that he has benefitted, and not the gardener's total fee.

Feedback is appreciated! It can be sent toatendler@torah.org.


This week's class is based on a column by Rabbi Tzvi Shpitz, who is an Av Bais Din and Rosh Kollel in the Ramot neighborhood of Jerusalem. His Column originally appears in Hebrew in Toda'ah, a weekly publication in Jerusalem. It has been translated and reprinted here with his permission and approval.

We hope you find this class informative and stimulating! If you do not see a subscription form to the left of the screen, access the Advanced Learning Network to subscribe to Business-Halacha.

For information on subscriptions, archives, and other Project Genesis classes, send mail to learn@torah.org for an automated reply. For subscription assistance, send mail to gabbai@torah.org.

Please Note: The purpose of this column is to make people aware of Choshen Mishpat situations that can arise at any time, and the Halachic concepts that may be used to resolve them. Each individual situation must be resolved by an objective, competent Bais Din (or Rabbinic Arbitrator) in the presence of all parties involved!

 


ARTICLES ON MIKETZ AND CHANUKAH:

View Complete List

Just Say No
Rabbi Dovid Green - 5761

Yehuda, Yosef and Chanukah
Shlomo Katz - 5763

We Should Not Assume What Happens Is Necessarily 'Bad'
Rabbi Yissocher Frand - 5766

> Help From Heaven - To Forget
Rabbi Yissocher Frand - 5760

Days of Eight
Rabbi Label Lam - 5763

The Meaning of Miracles
Rabbi Yehudah Prero - 5766

ArtScroll

Rabbi Frand on Parshas Miketz
Rabbi Yissocher Frand - 5770

Chanukah: A Postscript
Rabbi Yehudah Prero - 5756

Associated Press
Rabbi Mordechai Kamenetzky - 5761

Looking for a Chavrusah?

Basic Concepts and Laws
Rabbi Yehudah Prero - 5761

The Essential Attributes of Being an
Rabbi Yissocher Frand - 5771

Straightening Out The Cause And The Effect
Rabbi Yissocher Frand - 5773

Frumster - Orthodox Jewish Dating

The Key To Something More
Rabbi Label Lam - 5762

Bit By Bit
Rabbi Eliyahu Hoffmann - 5759

Enlightening the Present From the Past
Rabbi Yehudah Prero - 5766

In Your Dreams
Rabbi Eliyahu Hoffmann - 5765



Project Genesis

Torah.org Home


Torah Portion

Jewish Law

Ethics

Texts

Learn the Basics

Seasons

Features

TORAHAUDIO

Ask The Rabbi

Knowledge Base




Help

About Us

Contact Us



Free Book on Geulah!




Torah.org Home
Torah.org HomeCapalon.com Copyright Information