There has been an increase in insurance claims that are questionable, particularly from California and New York, but it is something that seems to be happening all across the nation, to some degree. When insurance companies deal with questionable claims, it can, potentially, make the cost of insurance increase for everyone, not just for the people who commit insurance fraud.
Insurance fraud is expensive. Whenever an insurance company becomes aware of what appears to be a questionable claim it has to do some sort of investigation. This will require time and effort from workers, who need to be paid. If there are a lot of questionable claims, it could, potentially, drive up the cost of insurance for all of the insurance company’s customers, even the honest ones. This is why insurance fraud is not, as some people might believe, a “victimless crime”.
Questionable insurance claims in New York have increased by about 4.5% in 2010. According to the National Insurance Crime Bureau (or NCIB ), there were 7,026 suspicious claims reported by insurers in 2010, compared with the 6,726 questionable claims that insurers reported in 2009.
Every time a questionable claim is referred to the NICB it must closely review that claim, and figure out if an investigation is warranted due to indications of fraud. Just one claim could contain up to seven different reasons as to why the insurer felt the need to tell the NCIB about the claim.
Of the questionable claims that came from New York in 2010, the majority of them, 57%, came from New York City. All of the rest were pretty much scattered throughout the state of New York, with the second highest number of claims, 145, coming from Buffalo. Most of the questionable claims, 83%, were filed under personal automobile policies, for a total of 5,838 claims. The majority were referred due to belief of “faked or exaggerated injury”, followed by “excessive treatment”, and “staged/ caused accident”.
In California, there has been an increase of questionable insurance claims of 9% between 2008 and 2010, according to the NICB. In that time frame, 20% of all the questionable claims that were reported throughout the nation came from California. Los Angeles topped the list of California cities with suspicious claims, with 5,461 claims, followed by San Francisco (1,736 claims), San Diego, (1,627 claims), Sacramento (1,361 claims), and San Jose (1,301 claims).
The claims from California that were investigated by the NCIB were ones that insurers considered suspicious for certain reasons. Some involved questionable vehicle theft, or faked or exaggerated injuries. Others involved faked damage, theft of items other than the vehicle itself, or a lack of cooperation from the person who made the claim in the first place.
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