Inflated claims of theft and tolerance threshold of insurers: Experimental analysis of situational deterrence

Insurance coverage provides victims of theft and burglary a convenient opportunity to boost their losses. The paper reports the findings of a situational deterrence field experiment where customers of an insurance company who reported their thefts were randomly assigned to either a deterrence or a permissive condition. Average losses in both groups were compared to the losses of a control group. Findings indicate a deterrent effect but only when the claims in the deterrence condition were handled face-to-face (at their home). A significant offending effect was also created in the permissive or impunity condition but only when the claims were handled at a distance (by phone). More generally, these findings show how current perceptual survey research designs are likely to neglect crucial situational and interpersonal features that shape the deterrence process.