Monday, June 6, 2016

Stopping Insurance Fraud Will Require...

We often talk about how much insurance fraud costs the country every year and different fraudsters can get away with their scams and make millions off insurance companies. Today, we are going to take a little break from talking about insurance scams and insurance investigations and discuss what needs to be done to minimize the damage.
Insurance investigators, companies and policy holders can only influence the process to a certain extent, the real change in the situation will happen when the government decides to make changes like the ones mentioned below:

Weak Laws

Many states in the U.S. have weak laws against fraud, and insurance fraud in particular. For example, New Jersey’s immunity law, which prevents anti-fraud agencies from sharing information related to cases of fraud. So the first thing that needs to change is these laws. In addition, harsher punishments for people who commit these frauds should also be considered.

News Coverage

More often than not, insurance scam cases escape being noticed be the media. Local newspapers or electronic media may mention the story once or twice but an insurance scam story rarely makes it to the national television. This needs to change, if we are to minimize insurance fraud in the country. The magnitude of awareness that the media is able to create can help people learn about scams and protect themselves.

“No-fault” Change

The no-fault insurance system, like the one in New York, needs to change. This system is prone to scams, hence the rise in no-fault insurance fraud cases in the state. Doctors, lawyers and policy holders are involved in such scams and because of that, honest policy holders have to pay premiums that are 5 times higher than in other states.

State Level Anti-fraud Authority

This change may take some time and effort to enact, but it would very beneficial to formulate state governed anti-fraud authority. An office, whose sole purpose would be to investigate and catch fraudsters, would really deter scammers.

Congress Funding

The Congress should provide funding to agencies that investigate insurance fraud, so they can function at full capacity and are able to uncover schemes that target policy holders and insurance companies.
These are some of the major changes that should significantly help the government reduce the number of insurance scams happening in the country. But until these changes come into effect, if they do at all, insurance scam investigation units, like ours, have to do their part to help clients uncover the truth through insurance fraud investigations.

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