Vigilance and Detailed Documentation are
Key Prevention Measures
LOS
ANGELES, June 6, 2024 /PRNewswire/ -- While
inflation continues to drive up home and auto insurance costs,
fraud is a hidden culprit contributing to the hikes.
Whether you're an actual victim of insurance fraud or
simply an active policyholder, the reality is that insurance
fraud impacts everyone. And as the frequency and
complexity of fraudulent activities increase, so does the cost of
insurance for all policyholders.
What exactly is insurance fraud? It's a
deliberately deceptive act with the goal of receiving a wrongful
payout from an insurance process. It can be committed by
applicants, policyholders, third parties or even the insurance
providers themselves — and it affects virtually every type of
insurance including auto and homeowners.
"The total cost of insurance fraud for non-health
insurance is estimated to be more than $40
billion per year. To put that into perspective, insurance
fraud costs the average U.S. family between
$400 and $700 per year in the form of increased premiums,"
said Steve Wang, Manager, Divisional
Claims/Head of Special Investigations Unit at Mercury
Insurance.
Insurance fraud is committed in various ways, but
the main offenses include fraudulent claims, application
fraud and premium fraud. Of these,
fraudulent claims occur most frequently, which involve offenders
filing false or exaggerated claims to receive benefits they are not
entitled to. For example, a policyholder may intentionally cause
property damage in order to file a claim.
"There are several common schemes of which consumers should be
aware of. Staged auto accidents, adding damage to vehicles after a
loss and switching drivers on accident reports are a few of the
most prevalent scams. Additionally, there are crime rings that
specialize in 'slip and fall' schemes, which involve fake injuries
and false claims," said Wang. "Making our job even more difficult
is the fact that today's scammers are technologically savvy and
have access to sophisticated equipment.
"They routinely produce fake medical records, duplicate checks,
and false identifications and business licenses. To maintain an
advantage, we are constantly working to stay ahead of the
technological curve," continued Wang.
Given the widespread ramifications of insurance
fraud, consumers may be wondering what they can do to
help combat it. According to Wang, if consumers aren't looking for
insurance fraud, they won't find it. "I always tell
people to document suspicious activity and incidents. When it comes
to cracking these cases, the devil is in the details," he
added.
Here are some other tips that consumers should be aware of:
- When looking at policies, verify the insurance company:
Only buy from authorized companies and agents. Unauthorized
insurance operations are illegal and policyholders are unprotected
should the company go bankrupt. In California, consumers can verify this
information here:
https://www.insurance.ca.gov/0150-seniors/0200beforebuy/CheckInsCo.cfm.
Know that if the price quoted sounds too good to be true, it
probably is. Low premiums are great, but not if the insurer is
unable to cover a claim.
- Fill out the application carefully: Never sign blank
forms or blank applications. Incorrect, incomplete or false
information on an application can jeopardize insurance coverage. It
is a crime to supply false information on an insurance application
or claim.
- Read the policy: Expect a copy of the policy from the
insurer within a reasonable amount of time. Read it promptly to
verify that it contains the proper coverage needed. If there is a
discrepancy, contact the insurer immediately.
- Involved in an accident? Call the police: Always call
the police and document unusual circumstances or activities. Gather
as much information as possible at the scene of the accident.
- Maintain detailed records: This includes bills for
collision repairs, home/property repairs and medical services. Keep
copies of all insurance records, including copies of all premium
payments.
- Be vigilant with billing: Watch for double billing or
unexplained charges for any service received as part of an
insurance claim. Avoid paying for premiums in cash and opt for
checks or online payments.
When suspicious activity is observed, regardless of insurance
provider, Wang urges witnesses to alert the SIU and to contact law
enforcement by calling 800-835-6422 or reporting the incident
online.
To learn more about insurance fraud and its
ramifications, visit Uncovering the Truth: Understanding Insurance
Fraud and Its Impact.
About Mercury Insurance
Mercury Insurance (NYSE: MCY) is a multiple-line insurance
carrier offering personal auto, homeowners, and renters insurance
directly to consumers and through a network of independent agents
in Arizona, California, Georgia, Illinois, Nevada, New
Jersey, New York,
Oklahoma, Texas and Virginia, as well as auto insurance in
Florida. Mercury also writes
business owners, business auto, landlord, commercial multi-peril
and mechanical protection insurance in various states.
Since 1962, Mercury has provided customers with tremendous value
for their insurance dollar by pairing ultra-competitive rates with
excellent customer service. Mercury has earned "A" ratings from
A.M. Best and Fitch, as well as "Best Auto Insurance Company"
designations from Forbes and Insure.com. For more information visit
www.MercuryInsurance.com or follow the company on Twitter or
Facebook.
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SOURCE Mercury General Corporation