Illegal street racing is an expensive hobby.  Most of the street racers are young adults still in school or with entry-level jobs.  They have limited disposable income.  So what do they do?  Some of the folks who make the pastime a passion have found a way to pay for everything: insurance fraud.

Under the street racer’s code, winners usually get the spoils of war— the losers’ engines, stereo, custom seats or expensive parts.  The loser may then dump his stripped car by the road, lie that someone stole it, and collect insurance money to buy new parts or a new car.

How much insurance money is stolen remains unknown.  Even so, it’s premature to say street racing fraud is a fraud epidemic.  Still, the warning signs are strong enough that insurers are paying closer attention to suspicious losses.  Many of the vehicles checked have multiple claims.

 Racers do like to brag, however, and investigators are starting to troll around chat rooms to find information from recent races.  It is but one way to spot the red flag of insurance fraud.

Many states are starting to regulate the heavily modified cars both for safety and environmental issues, restricting the use of certain after-market parts and requiring tougher safety inspections.

Penalties may be the stiffest in San Diego, where the city will impound your car for 30 days if caught street racing and sell it the next time you are caught.  Even spectators can be arrested.  Removing the cheering crowds will remove the attention from the race.  That tough stance has helped San Diego virtually eliminate street racing.

While legislation and arrests are important, convincing young people not to race from the start may have a bigger impact.  Teaching parents where their children are getting money for tricked-out cars is a good start, too.

Teach your children not to race.  It will save insurers money, and maybe even your child’s life or a spectator’s life.  Also, if you see or know of any suspicious activity, don’t hesitate to call your local law enforcement agency.