Insurance fraud accounts for 10% of incurred losses and loss adjustment expenses that constitutes around $30 billion dollar a year for the property/casualty insurance industry, as estimated by the Insurance Information Institute. Actually increasing insurance fraud is posing a great cause of concern in our lives.
Fraud classified as a crime in the state's penal code. A fraudulent act is committed if information in insurance documents if falsified in order to get lower premium rate or to inflate the amount of loss. Actually any representation provides to insurer is accepted on the basis of utmost good faith.
Fraud originates at different points in insurance deals and from the service providers to policy-holders.Fraud can be in various forms such as misrepresentation of facts in claim documents, inflating the actual claim, staging false accidents, lodging claims for damages or injuries that never happened. Fortunately nearly 40 states have fraud bureaus empowering them to investigate any suspected fraud.
According to an annual report released recently by the State Insurance Department, there were 700 arrests in 2007 alone in the light of the investigations conducted by New York's Insurance Fraud Bureau, a 17% increase from 2006.The bureau received reports of about 22079 suspected fraud last year and most of these were strangely from agents.
In sting operations, targeting car lifting/thefts in New York Metropolitan and Long Island area, 26 suspects were arrested and 92 vehicles valuing $ 1 million dollar were recovered. A fraud broker for Lloyd's of London, had sold more than $ 8 million in bogus insurance contracts for bars and restaurants.
Several suspects, including a medical clinic operator were arrested in New York City and Buffalo-Niagara region for allegedly staging numerous fake accidents in Western New York.The passengers and drivers of these cars were forging claimed that they were injured and received treatment at those makeshift clinics. Interestingly in some cases, the alleged injured persons were miles away from the accident spot at the time of alleged accidents.
So far, around $ 20 million had been directed to 147 people in court-ordered restitution. Even just after the Hurricane Katrina in 2005 several cases of insurance fraud had been reported to bureaus.In those cases, some home-owners or renters policy-holders lodged fraudulent claims or inflated claims for expensive items like stereos, televisions they never purchased.
| Kaushik Adhikary operates http://www.myinsuranceinsiderinfo.com a blog all about fresh and quality content on insurance and personal finance field. He loves giving away Free Stuffs and now giving away Free 5 Days Interactive Email Course and Free Membership and Newsletters. |
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