Andy House has been accused of driving his Bugatti Veyron, a rare French car, into a marsh to collect fraudulently on insurance. According to this site, Mr. house took out a $2 million dollar insurance plan on the $1 million dollar collectible. While driving his car, Mr. House swerved to avoid hitting a pelican. The case in now in a federal district trial court.
Insurance companies seldom insurance an item for more than what it's worth because that action creates perverse incentives. Economists would say that a moral hazard is created. That is, the owner of the car would have an incentive to act recklessly because the value of the insurance payout is greater than the worth of the car. So wrecking the car would actually be profitable. If the facts of this case are accurate, a clear moral hazard was created by issuing an insurance contract for a greater value than the worth of the car.
Mr. House should have been required to have a huge deductible and a large premium on his car. In the absence of both, Mr. House took a risk and wrecked his car, in my opinion.