Friday, February 1, 2008

How much is Insurance Fraud Costing You?

How much is Insurance Fraud Costing You?

The answer: $80 billion a year or nearly $950 for each family as projected by the Coalition Against Insurance Fraud. Honest consumers and businesses continue to pay a heavy price for a crime that continues to happen everyday. While money out of pocket is certainly a substantial loss, insurance fraud affects your bottom line in other ways and sometimes with deadly consequences.

Insurance fraud inflates the cost of everything we buy and use due to the higher premiums for health and commercial insurance that are passed onto the consumer. Premiums for auto and homeowners insurance also stay high because insurance companies pass on the larger costs of insurance fraud to policyholders. Businesses lose millions in income annually because fraud increases their costs for employee health coverage and business insurance. People can lose jobs and health coverage when insurance companies go bankrupt due to fraud.

The elderly especially are often at risk for insurance schemes that sell nonexistent health policies or perform poor medical care to illegally inflate health insurance claims. Seniors spend life savings and never receive the medical care they need. Lives are put at risk with staged auto accidents and arson. People sometimes even whole families die because of these deadly acts. Murder is committed and even pets can lose their lives so life insurance money can be collected.

At the end of the day, fraud is everybody's problem but many consumers believe insurance fraud is justified. Tolerance only allows for this crime to continue. According to the Coalition Against Insurance Fraud, "Two of three Americans tolerate insurance fraud to varying degrees; two of five Americans want little or no punishment for insurance cheats; they blame the insurance industry for its fraud problems because they believe insurers are unfair." New York State Alliance Against Insurance Fraud recently took a poll to evaluate New Yorkers attitudes towards insurance fraud and their willingness to commit fraudulent acts. For results of this poll click here.

To do your part to combat this problem; remain honest about your insurance claims and report those you know that are not. Contact the New York State Fraud Bureau to report at 1-888-372-8369. or call the toll-free hotline of the National Insurance Crime Bureau 1-800-835-6422