Morse Insurance Blog

The Insurance Research Council (IRC) estimates that auto insurance fraud has cost the industry an extra $4.8 to 6.8 billion in claim payments in recent years. This means that unsuspecting insurance customers may be paying for these bogus or inflated claims through higher MA insurance premiums.

More than one in 10 bodily injury claims appeared to have elements of fraud, according to the IRC, while claim build-up, where claimants exaggerate the costs of an otherwise legitimate claim was seen in 20 per cent of bodily injury claims.

The problem of insurance fraud is tackled in a number of ways, including insurance fraud investigation units, such as the Insurance Fraud Bureau of Massachusetts (IFB). The IFB investigates all types of insurance fraud or misrepresentation and refers cases for criminal prosecution. In terms of auto industry fraud, cases can range from orchestrating a fake car theft, claiming extra passengers in a car to increase injury claims, faking or exaggerating injuries, altering insurance documents, staging accidents and a lot more.

More sophisticated measures to fight insurance fraud are being used by some insurance companies, such as geographic data mapping, predictive modeling, or social networking analysis. Teaching people to be aware of insurance fraud, while making them wary of the consequences of misrepresentation, such as higher MA insurance costs, denial of claims, cancellation of insurance and criminal prosecution, can also help reduce insurance fraud.

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