January 16, 2013 (Powerhomebiz.com) National Quotes’ recent research has shown that many states across the nation are reporting a record number of insurance fraud allegations due to an increase of suspicious activity reports.
According to the FICO and Property Casualty Insurers Association of America (PCI), 45 percent of insurance brokers estimate that insurance fraud accounts for 5 to 10 percent of the total claims filed. Others report insurance fraud accounting upwards of 20 percent, raising premium rates by an average $300 per household every year.
Russ Schreiber, the head of FICO insurance, reported, “The insurance fraud problem is estimated to exceed US$40 billion globally and is showing no signs of abatement.” Most insurance scams are attributed to sophisticated schemes involving several members, such as the $279 million fraud ring in New York City that was discovered earlier this year.
According to industry and federal estimates, insurance brokers pay out tens of billions of dollars every year for fraudulent and exaggerated claims.
“It is clear insurers understand the scope of the insurance fraud problem, and are taking steps to reduce it. However, we also want the public and policymaker to recognize that consumers are paying what amounts to a ‘fraud tax’ that is far too expensive for hard-working citizens,” stated Robert Passmore, senior director of PCI’s personal lines policy.
NationalQuotes has learned that several initiatives are being put into place to decrease fraudulent claims, with predictive analysis accounting for 45 percent of respondents, anti-fraud teams for businesses accounting for 37 percent, link analysis accounting for 31 percent, business rules for halting fraud accounting for 29 percent, and external databases accounting for 29 percent.
“Early detection is the key to mitigating fraud losses for insurers. Solution like the FICO Insurance Fraud Manager not only help detect outright fraud, but also combat abuse and waste, the gray area of insurance claims,” reported Schreiber.
False or inflated home and auto insurance claims, staged slips and falls, and fake healthcare plans are the most common forms of insurance coverage fraud, and experts are reporting that insurance fraud is hitting policyholders where it hurts most – in their wallets. http://www.nationalquotes.com