What is the scheme known as ditching in automobile insurance?

Ditching in automobile insurance refers to the act of reporting a stolen vehicle in order to collect an insurance payout for the supposedly stolen car. This scheme is characterized by the policyholder deliberately abandoning or "ditching" their vehicle with the intention of making it appear that the vehicle was stolen. Once reported, the insurer investigates the claim, and if they accept it, the fraudulent claimant may receive compensation that is not rightfully theirs.

This specific definition aligns with the nature of deceit involved in the scheme, as it exploits the trust relationship between the insurer and insured by fabricating a theft that has not occurred. This fraudulent act can lead to significant financial losses for insurance companies, as it undermines the integrity of policy systems designed to support legitimate policyholders.

In contrast, the other options describe different types of fraudulent activities but do not pertain specifically to the act of ditching. Reporting a stolen vehicle is a clear yet dishonest approach to insurance claims, making it a distinct type of fraud within the broader category of fraudulent insurance activities.