You can put stock in one industry to do well despite the recession, but it’s unlikely to show up on the NYSE. Insurance fraud has been the favored crime for unethical white-collar workers looking to fake injuries, and they’ve also began denting their cars, to claim a quick bundle. According to the National Insurance Crime Bureau (NICB), questionable claims went up by 27% between 2010 and 2012. That figure breaks down to 9% between 2010 and 2011, and 16% between 2011 and 2012. Insurance fraud investigators must have had a heyday.
Rising fraud insurance claims is hardly a US phenomenon. In the UK, bogus car insurance claims went up by 20% since 2012. Fake car crashes led to a combined fraud of £811m in 2013, with the total fraud up by 18% over the previous year.
The cities with the highest levels of insurance fraud were New York with 13,564 questionable claims, Los Angeles with 7,779, Miami with 5,503, Houston with 5,464, and Baltimore with 3,690.
State-wise, California lead the way by a huge margin with 58,415 suspected cases of fraud from 2010 to 2012. Following were Florida with 29,086 cases, Texas at 27,107, New York at 23,402, and Maryland at 10,315. Population-wise, the states most vulnerable to insurance fraud were Kentucky, where suspected fraud levels rose by 89%, Vermont by 88%, Rhode Island by 81%, Alaska by 75%, and Maryland by 70%.
Said to be the easiest kind of insurance fraud, deliberately damaged cars made up the bulk of nationwide fraud cases, with 209,724 suspected fraud claims. Home insurance was the second most common source of insurance scam, with 40,747 questionable claims, after which worker salary and liability policy scams accounted for 11,151 cases. Commercial car and liability insurance generated a combined 17,031 cases. However, fire insurance and personal property insurance companies breathed a little easy, since they saw the number of questionable claims drop slightly from 2010 to 2012.
Those slipping and falling their way to insurance claims were under the radar, with insurance companies referring over 50,000 cases to the NICB and surveillance investigators for review. Also under scrutiny were questionable theft of heavy equipment and vehicles with 35,508 questionable claims, miscellaneous property damage or prior loss at 29,646 claims, suspicious loss of miscellaneous belongings at 29,017 claims, and suspicious loss or theft of belongings at 24,867 claims.
Insurance scams are common because instigators often encourage customers and family members to use them to save some money, making the scams look easy. As a result, innocent insurance customers have to pay higher rates and premiums. If you suspect or know someone of participating in insurance fraud, don’t be an onlooker – inform the authorities.