Insurance fraud: A $40 billion battle
The final issue any person wants is for his or her insurance prices to increase. Most policyholders would be shocked to know it&rsquos the final issue their insurance coverage firm wants to happen, as well. That’s why most major carriers have a division of investigators devoted to stopping a single of the primary causes of rate hikes: insurance coverage fraud. In fact, fraudulent insurance claims are the second most expensive white-collar crime in America &ndash to the tune of $ 40 billion annually.
&ldquoEach year the typical U.S. loved ones is hit with $ 400 to $ 700 in elevated premiums due to phony insurance coverage payouts,&rdquo says Dan Bales, national director of special investigations for Mercury Insurance coverage, which established a Unique Investigations Unit in 1978 to aid fight insurance coverage fraud. &ldquoThe objective of the SIU is to limit these payments and catch the criminals accountable.
&ldquoThink of us as the CSI of the insurance coverage market. We square off against mobsters, organized crime, dirty lawyers and physicians, white-collar con artists and even the occasional celebrity to help maintain down fees for our policyholders.&rdquo
Insurance coverage fraud is a game of numbers. Insurance prices are calculated using statistics and mathematics to project risk. So, by lowering the probability for pricey insurance scams, insurance coverage companies have financial flexibility to offer you clients low prices.
Making the SIU&rsquos job tougher is the truth that the culprits behind these scams aren&rsquot run-of-the-mill criminals. &ldquoToday&rsquos scammers are technologically savvy and have access to sophisticated equipment,&rdquo says Bales, who&rsquos been involved in a lot more than 35,000 claims investigations throughout his 27-year profession at Mercury. &ldquoThey routinely create, among other things, fake health-related records, duplicate checks, and false identifications and enterprise licenses. To maintain an advantage, our SIU is consistently working to keep ahead of the technological curve.
&ldquoI don&rsquot want to give away any industry secrets, but on any offered day, the typical particular person is caught on camera 12 to 16 occasions. This permits us to pull footage or images from ATMs, intersection cams, private firms, houses, cell phones and even social media to catch criminals in the act.&rdquo
A single query Bales hears quite usually is, how can shoppers aid fight fraud? &ldquoWe have a saying: If you&rsquore not searching for insurance coverage fraud, you won&rsquot uncover it. So, I constantly inform folks to document suspicious activity and incidents. When it comes to cracking these situations, the devil is in the particulars.&rdquo
There are several frequent schemes of which shoppers must be conscious. Staged auto accidents, adding harm to vehicles after a loss and switching drivers on accident reports are a couple of of the most prevalent scams.
Bales says regardless of the insurance coverage provider, when suspicious activity is observed, the witness ought to alert the SIU and law enforcement by calling 1-800-TEL-NICB or by texting the keyword &ldquofraud&rdquo to TIP411.
Here are some of his other ideas:
* If you&rsquore involved in an auto accident, always get in touch with the police and document uncommon situations or activities.
* Obtain detailed bills for collision repairs, house/house repairs and medical solutions.
* Never ever sign blank insurance coverage claims forms.
* Watch for double-billing or unexplained charges for any service received as portion of an insurance coverage claim.
* Be conscious that there are crime rings that specialize in &ldquoslip and fall&rdquo schemes, which involve fake injuries and false claims.
* Often collect as considerably details as possible at the scene of an accident.