INSURANCE FRAUD INVESTIGATIONS

INSURANCE FRAUD

Insurance fraud is a deliberate deception perpetrated against or by an insurance company or agent for the purpose of financial gain. Fraud may be committed at different points in the transaction by applicants, policyholders, third-party claimants, or professionals who provide services to claimants. Insurance agents and company employees may also commit insurance fraud. Common frauds include “padding,-” or inflating claims,- misrepresenting facts on an insurance application,- submitting claims for injuries or damage that never occurred,- and staging accidents.

STATISTICS

• Insurance fraud costs the U.S. $308.6 billion annually nationwide.

• Property-casualty fraud steals more than $30 billion each year.

• Insurers pay out up to 10% of their claims cost on fraudulent claims annually.

• At least 1 in 10 small business owners worry that their employees will fake work-related injuries.

• The total cost of insurance fraud (non-health insurance) is estimated to be more than $40 billion per year.

• Insurance fraud costs the average U.S. family between $400 and $700 per year in the form of increased premiums.

• All of this happens even though 95% of insurance companies use anti-fraud technology.
  

WORKERS COMPENSATION INVESTIGATIONS

The Coalition Against Insurance Fraud (CAIF) estimates that workers’ compensation insurance fraud alone costs insurers and employers $6 billion a year.

CLAIMANT FRAUD

Examples of claimant fraud include over-utilizing medical care to keep receiving lost income (indemnity) benefits, exaggeration of symptoms, working while allegedly disabled and not reporting income, claiming a job-related injury that never occurred or claiming a non-work-related injury as a work-related injury.

PREMIUM FRAUD

Employers who misrepresent their payroll or the type of work carried out by their workers to pay lower premiums commit workers compensation fraud. Some employers also apply for coverage under different names to foil attempts to recover monies owed on previous policies or to avoid detection of their poor claim record.

GENERAL / AUTO LIABILITY INVESTIGATIONS

Auto insurance fraud ranges from misrepresenting facts on insurance applications and inflating insurance claims to staging accidents and submitting claim forms for injuries or damage that never occurred, to false reports of stolen vehicles.

• Personal-lines auto insurers lose at least $29 billion a year in premium leakage. This involves missing or wrong information that drivers provide insurers, which inaccurately lowers auto premiums.

• Fraudulent claims mostly involved chiropractic treatments, physical therapy as well as alternative medical care. In other words, auto injury claim fraud and abuse accounted for between 13% and 17% of total payments for auto injury coverages.

• No-fault scams cost the average two-car family in Florida $100 in increased auto premiums.

• 21% of bodily injury claims and 18% of personal injury protection claims that ended with payment in 2012 appeared fraudulent.

• The average two-car family in Florida pays nearly $100 more in auto premiums thanks to no-fault scams.

• No-fault fraud and abuse cost consumers and insurers about $658 million in 2011 in Florida alone.