Ethics Question Re: Insurance

Okay, here’s the scenario: Guy A and Guy B are good friends. Guy A just bought a new house. The house doesn’t have a furnace in the garage and he really wants one. The contract on his house included an appliance protection clause, stating that if his furnace (or any other appliance) goes south in the 1st year, it will be replaced. He has a friend in the furnace business that will give his furnace an artificial “last rights” so he can get the money and purchase a new furnace for his garage.

I know this is bad. This is stealing. But Guy B doesn’t seem to think it’s so bad because “the insurance will cover it.” Guy B is wrong, but should I blow off Guy B for not taking a harder stand, even though he’s not doing anything wrong…just condoning it?

Guy B is one of the reasons insurance rates are so high. He believes it is okay to defraud the insurance company since he’s paying for it. It’s fraud. I’m always tempted to turn such people (the fraudsters, and if I read your OP right, that isn’t Guy B, but Guy A) in, because their actions cost me money, even if they don’t see it that way.

Does he think it’s covered by magical Insurance Pixies who conjure up golden coins?

Just as an aside, when I sold my last house, I included this coverage. I believe the covered items in the house were listed on the policy at the time of closing. So Guy A could well wind up with a broken piece of crap in his garage and nothing to show for it.

Just pretend that you are the one paying out the claim. Would you blame Guy A for pulling this “fast one” and having you pay out on a fraudulent claim?

Zev Steinhardt

Absolutely I would blame Guy A. I think he’s wrong and a thief. However, does Guy B’s condoning it, but not actually doing it, automatically put him on my shit list?

Is Guy B the friend supplying the furnace? If so, then he’s just as culpable. If not (i.e. he’s just a friend of A), then he’s simply misinformed and ethically challanged, but not a crook. Whether or not you should continue to deal with him is up to you, as you have to decide how far to want to excuse him. Lord knows that all of my friends aren’t perfect, and there are certain faults I’m willing to accept in a friend and others not. Which ones you are willing to accept is up to you.

Zev Steinhardt

Just one more point to consider. If you buy insurance from the same company that Guy A buys from, then consider the fact that B knows that A is stealing from you (since you pay higher premiums to cover fraud) and is condoning it.

Zev Steinhardt

No, he’s not getting the furnace from Guy B. I feel really bad that Guy B is thinking this is OK. I know nobody is perfect (including me, believe it or not! :wink: ), but this is so blatant. I mean, when I donate clothes to charity, I don’t always have an accurate number to give to the IRS. I tend to err in my favor. But I think this is a completely different animal.

This is precisely why insurance claims need to carry more weight. If he had an incentive NOT to make this claim, then perhaps he wouldn’t.

Perm, what do you mean?

I mean that if his insurance rates were 10 bucks a month, but would raise to 100 bucks a month if he were to make this claim. He would probably think twice wouldn’t he? However, if this were a true emergency he would still get the furnace that he needed, but would just be paying for it through a higher monthly fee.

This is a rather undeveloped thought, but insurance is a very sore subject of mine… there must be a better way to keep people from doing things like this, which raise MY rates.

Well one incentive not to file a fraudlent claim is the fact that in many states it is a felony.

Most insurance companies would want the “dead” furnace so they could attempt to collect any salvage value. I would be a little concerned when they determined that my “dead” furnace was actually quite alive and well.

What you are proposing is insurance fraud plain and simple. I would be quite concerned about being any part of the plan.

We had a similar thing on our house, but I think it was considered a “warranty” rather than “insurance”. I don’t know if that makes things different or not.

However, in our case, if something went wrong, we had to call the warranty company. Then, they told us who to call to get it fixed. The repair guy would come out, look at the appliance, and fix it. I suppose that if the appliance was really far gone, the repair guy could declare it dead and the warranty company would have given us a new one, but that never happened to us. Also, we had to pay a $100 deductable for each repair.

So, there are many flaws in Guy A’s plan. His insurance company may just wish to pay for repairs rather than a new furnace. His insurance company may insist on having a furnace person of their choosing inspect the appliance (and they’ll tell the insurance company that the furnace is just fine!) His insurance company may insist on a deductable (nothing is “free”) just to have their furnace guy inspect it. I would very surprised if Guy A’s plan works and he ends up with two fully functioning furnaces out of this. I bet that if he does carry out this plan, it will blow up in his face.

I’d put Guy B on my “suspect list”. He’s not doing anything wrong, per se, but his condonement of this idea does show that he’s a bit “ethically challenged”, as zev put it. I might be OK with him as a casual acquaintance, but I’d think twice before trusting him with anything important.

The insurance company that I work for would likely send an adjuster out to look at the furnace that’s broken.

This may eliminate the problem…


Not much of an incentive. If I really wanted to I could go over to my furnace now and “break” it. Insurance adjuster comes and “I have no idea what happened to it, sir”

My word against his… are they really going to sue me for it? Highly unlikely. This is (of course) barring that I beat it with a sledge-hammer or something completely obvious.

Right. What Zev said. No question, it’s wrong.

There are some “gray areas”- this isn’t one. For instance, some auto body shops will let you skate on the deductable. Since there is no direct cost to the Insurance agency- yes, you can accept this- although it can be argued that if they gave you a $200 discount, that should aplly to the overall bill.

eeesh, I misread the OP - thinking the friend was going to supply a “dying” second furnace that would have to be replaced by the insurance. Don’t mind me…

Even I think that is wrong! (notice how I didn’t deny that I would do it, though :smiley: )

Fagjunk Theology: Not just for sodomite propagandists anymore.