What's Your Honesty Quotient?

Being honest is like being pregnant; either you are or you aren't. But a new study has discovered that a high percentage of Americans believe in situational ethics. In other words, they view some crimes more negatively than others, and seem willing to commit crimes if they have the assurance they won't get caught. While we wouldn't equate murder with jaywalking, it is troubling that many citizens find that committing some crimes is okay, especially crimes that cost all of us tons of money.

These crimes are wide ranging -- from stealing cable television to running tollbooths to committing insurance fraud. To better understand how insurance fraud compares to other indiscretions, Progressive Insurance conducted a telephone survey of more than 31,000 Americans in May and June. The survey asked respondents not only how likely they would be to commit a variety of crimes if they knew they would not be caught, but also whether they would report someone they knew who had committed fraud.

The results indicate that while most respondents say they are honest, a large percentage are willing to cheat and commit crimes that cost the rest of us far more money than we probably realize. According to the survey, nine percent of all respondents -- that's nearly one in every 10 of us -- said they would commit insurance fraud if they knew they would not be caught. With that as part of the American mindset, it is no wonder the National Insurance Crime Bureau (NICB) estimates that all Americans pay $200 to $300 in increased insurance premiums each year just to cover the cost of insurance fraud.

And it's not only insurance fraud that respondents admitted being willing to commit. The survey also found that 13 percent of respondents admit they would steal cable television. Another 13 percent would inflate accomplishments on a resume. Some 12 percent would park in a space designated for a handicapped driver, and nine percent would drive through a tollbooth without paying. Finally, seven percent would take tax deductions they weren't entitled to.

While a few of the felonies and misdemeanors some Americans say they are willing to commit are penny-ante in terms of dollar cost, insurance fraud, which includes a wide variety of auto-related scams, has a huge financial cost. Tom Kaschalk, head of Progressive's national special investigations unit, said insurance fraud costs the American public more than $20 billion each year. It is the second most costly white-collar crime in America, behind only tax evasion. Worst of all, it's the honest consumer who's paying for the crimes others commit against insurance companies.

"People need to be aware of fraud, be willing to report it when they suspect it, and be willing to get involved to stop it," Kaschalk said.

Getting people to report fraud might be a tougher issue than you might imagine. The survey found that when it comes to reporting fraud, 29 percent of respondents said they would never report insurance fraud committed by someone they knew. In this area, however, it seems that money talks. Respondents throughout the US are four times more likely to say they would report someone if there was a monetary reward of up to $500 than if there was a reward of only $250.

Additionally, six percent of respondents would report fraud only if they didn't like the person who committed it. Key takeaway here: if you're going to commit fraud, make sure you're well-liked. More to the point: if you are concerned about the cost of auto insurance, consider the fact that fraud costs each of us honest consumers a couple C-notes a year. It is important to remember that car insurance fraud isn't a victimless crime, just because it seems a big insurance company takes the financial hit. The truth is, we all do. And please don't park in that handicapped space, either.


Cleveland-based Luigi Fraschini, who writes on automotive issues, claims to be an honest man. He frequently contributes to Driving Today and other publications.