Sometimes races involve a couple of testy kids informally dueling one-on-one. But street racing also involves organized confabs with dozens of power-packed cars, egged on by hundreds of screaming spectators.

It's an expensive hobby for drivers with little income beyond their allowances and entry-level jobs.

Insurers find cars jammed with up to $100,000 in custom add-ons, including $20,000 sound systems. The cars also are routinely totaled or damaged in dust-ups.

Insurance swindles pay for much of this expensive mayhem. One investigator reports that at least half of the racing cars he checks have multiple claim histories, and up to three out of four claims are fraudulent.

When a kid loses a race, for example, he often gives his custom wheels or other parts to the winners as a trophy. The loser then dumps his stripped car in a vacant lot and tells his insurer that someone stole it.

If his fender or hood gets crunched, he claims a hit-and-run driver rammed his car.

If his racing engine or tires burn out, he tells his insurer that thieves stole them.

Or maybe a kid wants fancy new custom parts. He scratches up his paint with a screwdriver or key, slashes the seats or tosses his tires, then says vandals did it.

Dishonest auto-parts shops provide fake receipts to support bogus claims. Some shops will even show kids how to set up scams and install stolen parts but charge insurers full freight.

Young racers also share scam ideas on Internet chatrooms, bulletin boards and peer-group street-racing Web sites.

Most insurers have little idea how much money they're losing. But beyond fraud losses, kids and bystanders also are dying alarmingly fast.

Some 18 people died in street-racing crashes in San Antonio during a recent four-month period, according to one auto insurance investigator, who reported that five teens died within 18 hours in a county in Maryland. In other instances, racers have allegedly slammed into cars and vans not involved in the races.

Most insurers have responded relatively slowly, though one company has an investigator full time on the racing beat. The strongest responses are coming from states and local communities themselves.

o San Diego has a police unit investigating local racing full time.

o Oakland has a new law that allows police to arrest race spectators.

o Police accident reports in Milpitas, Calif., are coded for street racing.

o Las Vegas sponsors local drag racing as a supervised alternative.

o Florida elevated street racing to a crime in June.

o Texas imposes up to six months in jail.

Community groups are also educating kids about illegal racing.

More insurers need to address this potentially large fraud exposure. As a first step, insurers need more loss data so they--together with policymakers--can take well-informed action. Claim databases, therefore, should reflect whether street racing is suspected in claims and scams.

Such information also should be shared with local law enforcement.

Insurers can play an important role in protecting public safety--and reducing auto insurance losses.

Insurers also should consider funding police programs and community-education efforts.

Clamping down on illegal street racing saves lives, gets troubled kids back on track, and builds public support for insurers as caring corporate neighbors. That's one race everyone wins.

Dennis Jay is executive director of the Coalition Against Insurance Fraud in Washington. For more information, go to www.InsuranceFraud.org.

Caption:

Teenagers are bilking insurers to finance an expensive--and deadly--habit of illegal street racing.