Did you have any idea that the average American household pays $1,030 per year in out-of-pocket costs as a result of insurance fraud? As reported by the S.C. Attorney General’s Insurance Fraud division, if insurance fraud were a business, it would be a Fortune 500 company!
A new report issued by the South Carolina Attorney General’s Insurance Fraud Division shows a whopping 44% increase in insurance fraud convictions in 2008, confirming 135 convictions for insurance fraud in 2008, a jump from 94 convictions in 2007. The number of complaints rose from 712 in 2007 to 815 complaints in 2008.
The breakdown of the claims filed in 2008 was:
Automobile claims 57%
Personal/Commercial Property 12%
Worker’s Compensation 11%
Life Insurance 3%
Interested in what the Department is seeing?
Seven of the most common types of insurance fraud are:
• Underreporting the number of miles you drive on your auto policy.
• Failing to report an accurate medical history when applying for health insurance.
• Faking or exaggerating injuries to avoid work and draw workers’ compensation benefits.
• Falsifying or overstating an injury sustained in a car accident — or even faking the accident — to achieve a large settlement or award.
• Staging an automobile accident which results in an inflated injury claim.
• Drawing accident and health insurance benefits because of exaggerated or even fabricated injuries or illness.
• Exaggerating the amount and value of items stolen from a home or business.
In an attempt to cut down on fraud, South Carolina has a mandatory reporting act that states, “any person, insurer or authorized agency having reason to believe that another has made a false statement or misrepresentation or has knowledge of a suspected false statement or misrepresentation shall, for purpose of reporting and investigation, notify the Insurance Fraud Division of the Office of the Attorney General of the knowledge or belief and provide any additional information within his possession relative thereto”.
A hotline has been established to report allegations of fraud: 1-888-95-FRAUD