Andre 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. Andre 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. Andre's actions in this case would constitute a fraud on the insurer if he claimed that the automobile had been stolen.

Question

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Andre's actions would be considered fraudulent because he intentionally misrepresented the loss of his vehicle to the insurer for financial gain, knowing that the vehicle was not actually stolen but rather sold and dismantled.

Andre Insured His Automobile Against Theft Under a Policy of Insurance