Insurance fraud - why not?

There is a recent report from the United States. In it, we learn that one in five of U.S. adults, nearly 45 million people, say that it is acceptable to defraud insurance companies under certain circumstances.

Four of five U.S. adults, think that insurance fraud is unethical. One in four Americans, think it is acceptable to defraud insurance companies. A full 8% say it is quite acceptable, to take undeserved money from insurers. A further 16%, think it is somewhat acceptable.

The statistics go on to show that one in 10 people, agree it is okay to submit a claim for an item that is not truly lost or damaged, or for injuries that did not occur. Two of five people, would be not very likely or not likely at all, to blow the whistle on someone who defrauded an insurer.

The insurance answer is to provide rewards for fraud, try to get accurate information on all claims that are submitted, and try to determine who is providing true information and who is not.

Adjusters are to always treat people in a fair, courteous and respectful manner. Even if an adjuster is suspicious that there is "something funny going on", this should not impact the treatment of the person making a claim.

The Insurance Corporation of British Columbia (ICBC) has been awarded more than $600,000 in damages and interest. This came from B.C. Supreme Court after a trial related to an insurance fraud ring.

The Supreme Court ruled in Insurance Corporation of British Columbia v. Suska that a variety of frauds and vehicle conversions were committed as a result of false stolen vehicle reports. Some vehicles were dismantled or disguised with phony vehicle identification numbers (VIN) for purpose of resale. The ICBC paid out claims between $6,000 and $59,000 per vehicle.

In Winnipeg, Manitoba police have made arrests in a fraud investigation called, "Project Rollback". This auto insurance fraud scam is estimated at $800,000 with the target being Manitoba Public Insurance (MPI).

The scam consisted of rolling back odometers on high-end vehicles to increase their value, making phony stolen vehicle reports and staging collisions or hit-and-runs, all to gain insurance money.

A Statistics Canada report, Survey of Fraud Against businesses shows that not all the frauds are being reported to the police. The report is based on a survey of 7,500 business operations and head offices. The sectors included retail, banking, health and property insurance.

Just under 45% of health and property insurance businesses reported experiencing fraud in 2008. Most of these claims, 77% involved inflated or false claims. About 70% of the health and property insurance establishments that experienced fraud suffered a financial loss as a consequence.

The study found that 46% of the property and health insurance establishments rarely or never contacted the police in cases of fraud. The reasons for not reporting are that 34% of the cases were very minor and about 33% where handled in house. About 36% said they they will report fraud to the police on occasion. Only about 18% of the individual health and property insurance companies said that they often or always report fraud to the police.

Adjusters sometimes appear to be suspicious people, but when you consider some of the fraudulent claims, it becomes a bit more reasonable for them not to accept answers at "face value".

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