Every year thousands of companies and individuals fall victim to false insurance claims. As a result, fraudsters run off with billions of dollars.
There are different kinds of insurance fraud: Arson, Workers Compensation, Health Care, Identity Theft, etc. But the most dangerous threat to companies and individuals is automobile fraud. Fabricated accident reports, exaggerated injuries, false claims! These can all leave our businesses and bank accounts in ruins if we do not take proper precautions. Having a dash cam installed in your vehicle will ensure that you have video evidence of all incidents that occur on the road. Such footage may be helpful in investigating insurance claims.
Here is a list of Hotspot states that have the highest rates of insurance fraud: (http://www.insurancefraud.org/statistics.htm#4)
- Claimed losses for medical expenses, lost wages and other expenses related to injuries from auto crashes in the New York City area have risen 70 percent over the past decade. This surpasses the 49-percent increase in medical-care inflation over the same period;
- Nearly one in four claims (23 percent) involved the appearance of claim abuse — fraud, material misrepresenting of facts, or buildup;
- Claims from the New York City metro area were more than four times as likely to involve apparent abuse (35 percent v. 8 percent for the rest of the state); and
- More than half of apparently abusive claims (52 percent) stemmed from accidents in Brooklyn or Queens. (Insurance Research Council, November 2011)
- No-fault auto-insurance reforms (HB 119) enacted in 2012 helped reduce fraud and lower PIP premiums 13.6 percent; (Florida Office of Insurance Regulation, January 2015)
- No-fault fraud and abuse cost consumers and insurers about $658 million in 2011 in Florida alone; and
- The average two-car family in Florida pays nearly $100 more in auto premiums thanks to no-fault scams. (Insurance Information Institute, January 2011)
- Massachusetts launched task forces in 13 communities against widespread staged-crash rings amid public outcry after 65-year-old grandmother Altagracia Arias died in a setup crash in 2003.
- Drivers in the 13 communities have saved $875 in auto premiums per year;
- Drivers in Lawrence — the “worst hotbed of fraudulent claims” — have saved more than $68 million;
- Larger chiropractors in Lawrence have decreased in both clinic counts and billings by up to 90 percent. High-volume physical therapy clinics (billings exceeding $100,000 annually) have been eliminated, and attorney involvement in PIP claims has dropped; and
- Staged accidents in Massachusetts have been reduced dramatically as people around the state, who used to be involved in fraudulent activities, have taken notice of the crackdown and altered their activities. (Insurance Fraud Bureau of Massachusetts, April 2013)
- The state fraud bureau received 17,981 suspected fraudulent claims in FY 2012-13, assigned 721 new cases, made 401 arrests, and referred 304 submissions to prosecuting authorities. The potential loss amounted to $120.1 million;
- The fraud bureau assigned 231 new cases and made 222 arrests and 172 referrals to prosecuting authorities involving organized automobile activity in major urban areas. Potential loss amounted to $5.1 million; and
- District attorneys receiving grants in 10 counties prosecuted 204 cases involving organized automobile fraud activity. They included 448 defendants with chargeable fraud totaling $8.3 million. District attorney prosecution resulted in 180 convictions. (California Department of Insurance, August 2014)