Putting the Brakes on Auto Fraud and Theft

Auto fraud and vehicle theft continue to be major issues — and they’re only getting more sophisticated. What once looked like random crime now costs U.S. businesses an estimated $14 billion each year. That includes:

• $7 billion in vehicle theft, increasingly involving high-tech tactics like relay attacks and VIN cloning

• $7 billion in fraudulent or exaggerated injury claims, often tied to staged accidents

And it’s not just companies with dedicated fleets at risk. Businesses where employees use personal vehicles for work — whether for sales, delivery, or site visits — face growing liability exposure. This is known as “grey fleet” risk, and it’s often overlooked until it’s too late.

Tech Tools That Help Fight Fraud & Theft

As fraud tactics become more advanced, technology is stepping up to meet the challenge. Today’s vehicles come equipped with tools that can help prevent fraud, verify claims, and improve driver accountability.

Here are a few modern tools businesses can use:

Event Data Recorders (EDRs)
These are the vehicle’s “black box,” capturing key crash data such as:

• Speed and braking force

• Seatbelt use

• Airbag deployment

Infotainment System Data
Newer vehicles often store:

• Recent destinations and GPS coordinates

• Synced phone and Bluetooth device logs

• Audio input history

This data can provide crucial context during a claim investigation — especially when an incident involves a personal vehicle.

Telematics & Fleet Monitoring Systems
For businesses with regular driving activity, telematics can track:

• Location and routing

• Driver behavior (speeding, harsh braking, idling)

• Maintenance alerts and usage patterns

This data not only helps with loss prevention but also improves operations and customer service.

Building a Culture of Prevention

While technology plays a big role, hiring and oversight practices are just as important. Clients should be encouraged to implement clear processes for selecting and managing drivers.

Here’s how to get started:

Hire Smart

• Run Motor Vehicle Reports (MVRs) before hiring any employee who might drive

• Look for drivers with no more than one point on their record

• Verify license status, suspensions, restrictions, and DUIs

Monitor Continuously

• Let drivers know their records and behavior will be reviewed regularly

• Add GPS tracking or use telematics for accountability

• Watch for red flags like excessive speeding or route deviations

Automate Monitoring

• Use third-party services like:

  • SAMBA Safety

  • Driver’s Alert

  • Driving Dynamics

These tools provide automatic alerts for:

• License suspensions or expirations

• New violations or DUIs

• Missed renewal deadlines

With monthly updates, employers can act before small issues turn into costly claims.

What This Means for Producers

Helping your commercial clients reduce auto-related risk isn’t just about protecting them — it protects your book, too. Fewer claims mean smoother renewals, better retention, and stronger carrier relationships.

In today’s competitive market, producers who help clients navigate risk proactively stand out. Whether your client has a couple of vehicles or a large fleet, every step toward fraud prevention matters.

Ready to Learn More?

Arrowhead’s Auto Aftermarket and Core Commercial programs offer tools, support, and technology to help agents and clients reduce risk and manage claims effectively.

🔗 Explore our program solutions: arrowheadgrp.com
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This post originally appeared here. It has been since updated and modified to better fit the need of our IWA producers.