Insurance fraud poses ongoing challenges for the property and casualty insurance industry, often emerging in subtle ways that require detailed investigation to uncover. Misrepresentation, particularly when policyholders conceal commercial vehicle use under a personal policy, can create significant risk exposure for insurers and lead to improper rating, claim complications, and losses that ultimately impact honest customers. For organizations like Maryland Auto Insurance, identifying these inconsistencies is essential to ensuring fair coverage and responsible policy management.
Recently, Maryland Auto examined a claim involving a policyholder who had been operating multiple vehicles under a Personal Private Auto (PPA) policy. Concerns arose during a previous loss in which the policyholder did not cooperate, prompting the Claims and Underwriting teams to question how the insured’s vehicles were being used. In the most recent loss, the driver reported that he rents the vehicle from the policyholder’s taxi company for $200 per week, even though the vehicle was insured under a personal policy rather than a commercial policy.
An investigator with Maryland Auto’s Special Investigations Unit (SIU) conducted a thorough review of the policyholder’s operations. As part of the investigation, several database checks were performed, including multiple vehicle sighting searches on all vehicles listed on the policy. These findings revealed a consistent pattern of commercial use.
The first vehicle, a 2005 Toyota previously removed from the policy, appeared in 35 sightings between June 2023 and May 2025. Photographs repeatedly showed the vehicle displaying exterior advertising in Spanish for a taxi company. The taxi company’s name appears to be referential to the policyholder, indicating that it is his taxi company.
A second vehicle, a 2012 Toyota, had 22 sightings between May 2024 and July 2025 and also displayed the same commercial signage. A third 2005 Toyota appeared 27 times in the sightings database from 2023 to 2025, again with visible advertising.
A 2022 Honda associated with the policy had 15 sightings during this period. Although this vehicle did not show any exterior signage, its activity still supported the broader pattern of use consistent with a taxi service.
In total, four of the five vehicles tied to the policyholder showed clear indicators of commercial operation. These findings confirmed the concerns initially raised by Claims and Underwriting teams that the policyholder may have materially misrepresented the nature of the business when obtaining a PPA policy, which is intended strictly for personal use.
The SIU review provided clarity on the policyholder’s actual operations and helped determine appropriate next steps regarding eligibility, coverage considerations, and potential policy action.
Because the use of the vehicle was not correctly represented, the rate applied didn’t match the actual level of risk, particularly the difference between a personal vehicle on the road and a vehicle being used for commercial purposes. Maryland Auto’s investigative work helps protect company resources and make sure coverage is issued fairly and at the appropriate premium rate for the associated risk.
