Newsletter Issue 3
Fraudulent Claims
Staging an auto accident or replacing an undamaged roof is a good way to get the attention of an insurance company. The wrong kind of attention, of course!
A new analysis from the National Insurance Crime Bureau (NICB) shows a double-digit jump in questionable claims in 2009 from 2008, primarily due to staged auto accidents and unnecessary roof replacements.
In 2008, the NICB handled 74,902 referred claims, but that number grew 14 percent, to 85,209, in 2009. NICB member insurance companies, including those representing the property, casualty, commercial, and vehicle categories, referred these claims to NICB for a further review and investigation based on one or more indicators of fraud.
Joe Wehrle, president and CEO of NICB, said the slight declines within a few categories of referrals could not prevent the overall number of questionable claims for 2009 increasing over the previous year, thanks to those questionable auto accidents and roof repairs.
"We've seen significant increases in questionable claims related to staged auto accidents, where organized criminals are trying to collect for injuries after deliberately causing an auto accident," Wehrle explained. "This increased reporting may be due in part to better awareness of these kinds of scams as we work with insurers and our law enforcement partners to alert them to the problem."
NICB also analyzed a greater number of questionable claims for hail damage, Wehrle said. These were cases in which "unscrupulous" roofing companies took advantage of storms to fake or inflict damage to roofs in an effort to get insurers to pay for an unnecessary roof replacement.
Wehrle praised NICB member companies for spotting questionable claims and passing them on to the bureau. "Our member companies are to be commended for doing an excellent job of scrutinizing claims and referring them to NICB in an effort to ensure that their customers are not being cheated by the criminals who try to take advantage of the insurance company's desire to pay claims as quickly and efficiently as possible," he said.
Fraudulent claims can be a significant drain on an insurance carrier's claims expenses, driving up premiums for insureds across the board. Therefore it is in everyone's interest to help eliminate fraudulent claims.
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The Connell Newsletter is a compilation of material from various sources and authors. The material is provided as general information and is not intended to be a replacement for legal or professional advice. For more information about Connell Insurance and the many resources available to our clients, visit http://www.connellinsurance.com.
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