Insurance Fraud on the Rise
We have heard the popular phrase “Survival of the fittest” that denotes adaptation of an individual to the environment according to the need. The economic recession has caused consumers to behave in a similar manner in the insurance sector. Insurance fraud is on the rise and consumers have diverted from the actual meaning of the above phrase. Studies reveal that insurance fraud has increased manifold ever since recession and liquidity crunch set in. Consumers are taking help of unfair means to get their insurance claim approved. This behavioral change among insurance holders is due to the fact that every consumer is trying hard to wrestle out of the credit crunch and to make ends meet and fulfill their financial obligations.
Reports also suggest that there were many insurance holders that compromised with their coverage to shed some costs. Insurance fraud is a common phenomenon that has taken place since time immemorial but has escalated following recession.
Statistical data indicating number of insurance fraud cases as of September 14th 2009 –
|
Type of insurance fraud |
Number of cases reported |
|
General fraud |
81 |
|
Auto surrender |
146 |
|
Staged auto insurance fraud |
45 |
|
Disability |
11 |
|
Underwriting related auto insurance fraud |
22 |
|
False auto claims/padding |
82 |
|
Drug diversion |
67 |
|
Business arson related insurance fraud |
40 |
|
Arson- homeowners |
66 |
|
Padding –homeowners |
16 |
|
Fake insurance claims- homeowners |
26 |
|
Insurer fraud (insider) |
68 |
|
Agent |
97 |
|
False claim- liability |
13 |
|
Life insurance |
31 |
|
Medicaid and Medicare |
206 |
|
Underwriting |
23 |
|
Workers compensation related insurance fraud- worker |
92 |
|
Workers compensation related insurance fraud- employer |
47 |
|
Workers compensation related insurance fraud- provider |
8 |
|
Medical false claims |
118 |
In am attempt to save money, insurance holders are trying out various methods. One of the noticeable types of insurance fraud is related to auto insurance and has been given the name Barbecuing a Beamer. In this type of insurance fraud, the owner of a vehicle sets his car on fire only to make claims later and to avoid making payments.
Experts are of the opinion that instead of adopting unfair means to reduce insurance costs there are various legal ways by which the insurance costs can be reduced and can be made affordable. Let us take the example of auto insurance. Some of the ways that can help your auto insurance costs to go down include the following –
- Increase deductibles
- Have less speeding tickets to your credit
- Have a safe driving record and less number of accidents in your record
- Use a traditional car instead of sports or luxury cars
- Install safety devices in your car etc.
So, if you have other “legal” ways to reduce your Arizona car insurance costs, it is better to follow them instead of taking refuge in unfair means.