Insurance Fraud

Post date: Jun 7, 2011 7:03:06 PM

It's not a victimless crime. Fraudulent insurance claims are up 46% between 2007 and 2009, and still rising. There has always been a correlation between down economies and higher insurance fraud, but organized crime also has it's roots in insurance fraud as well.

Just like any other business that has to pass down it's cost increases to it's customers, the insurance industry is no different. If a company experiences higher operating costs due to paying out more claims than usual due to fraudulent activity, their policy holder premiums will go up. It's that simple.

Some samples of insurance fraud are:

• • Dishonest body shops may try a number of scams like using counterfeit or used body-parts. Some dishonest shops install parts that are counterfeit, substandard or used, but charge you for expensive new parts. A shop may pad bills by “repairing” body parts and damage that doesn't exist.

  • Staged automobile accidents. Dishonest drivers will maneuver innocent motorists into auto accidents. The cars may only suffer a small dent, but the crooks still make large — and illegal — claims for fake injuries and car damage against your NY auto insurance company, or their own. Often these accidents are staged by organized crime rings that bilk dozens of unsuspecting drivers.

  • Replace undamaged windshields. Typically, crooks will convince drivers to replace perfectly good windshields. The crooks then lie to your insurance company that the windshield was seriously damaged and needs repairing. Next they’ll charge your insurer needless and inflated repair costs.

  • Workers compensation scams. NY Workers compensation insurance protects employees who are hurt on the job. This valued employee benefit pays for medical expenses, lost wages and other expenses while a worker heals. Most employers and their workers are very honest. Only a small number scam this coverage for personal profit, but the damage they cause is enormous.

  • Workers comp fraud is a very large crime in today. Tens of billions of dollars in false claims and unpaid premiums are stolen every year. Scams are forcing premiums higher, draining business profits and costing honest workers their pay and jobs. And you end up paying higher prices at the cash register. The large costs of fraud get passed onto all consumers.