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Accident Reconstruction Research: Insurance Fraud

Public Support Growing for Combating Auto Insurance Fraud

Insurance fraud continues to be a major factor in insurance costs for the public. An estimated $18 billion is stolen annually from property and casualty insurers, with the problem continuing to escalate.

Until recently, a unified approach in combating the problem of insurance fraud was lacking. A new organization, The Coalition Against Insurance Fraud, was established in early 1993 joining together for the first time consumer advocates, regulators, law enforcement officials and insurance officials to combat insurance crime.

A Public Attitude Monitor survey by the Insurance Research Council developed some disturbing information about insurance fraud. There are many common types of insurance fraud, and many are considered acceptable by an unusually high percentage of the public. Here are just a few types of common insurance fraud and the percentage of respondents who considered this type of act acceptable:

• Increasing the insurance claim to cover the deductible - 23%

• Increasing insurance claim to cover the premiums paid - 20%

• Omitting accidents/tickets from insurance application - 14%

• Listing adult as main driver of a car to be driven by a driver under age 21 - 20%

• Continuing to go back to doctor or chiropractor for treatment after injury has healed - 11%

• Underestimating the number of miles driven per year on an auto insurance application - 32%

• Claiming disability benefits and taking off work for a month because you are feeling "stressed-out" - 10%

• Pretending a hit-and-run accident occurred in order to submit an insurance claim - 7%

• Abandoning a car and reporting it stolen to the insurance company - 6%

Only through education will insurance consumers understand that fraud costs them in the end by forcing rates up. The joining of the insurance industry and consumer groups is particularly significant. By having this coalition of consumers, law enforcement officials and insurance regulators and companies all working together, the effort to inform the consumer will have much more credibility with the public. All are victims of insurance fraud, and the joining together of these groups can help present this growing problem to the public.