Crushing fraud can help relieve pressure on insurance premiums

Mitchell News-Journal (NC)

I was asked recently what can be done to keep homeowners' insurance premiums from going up. My response: Aggressively fight insurance fraud. The question came as I was explaining my decision to reject a recent average statewide 42.2% increase in homeowners' insurance rates. This white-collar crime is vast and affects about any type of insurance you can imagine. It puts upward pressure on property and casualty insurance such as homeowners' and automobile insurance. Fraud affects life insurance premiums and causes health insurance costs to go up. Insurance fraud is the villain of this story. It's a sneaky bandit that's out to rob you blind.

Some estimates suggest that 20 cents of every premium dollar go to cover the cost of insurance fraud.

A 2022 study conducted for the Coalition Against Insurance Fraud found that nationally, insurance fraud costs consumers a mind-boggling $308.6 billion a year. I say it costs consumers because insurers take losses due to fraud into account when their actuaries calculate insurance premiums. For a family of four, that comes out to about $3, 800 a year, or slightly less than $1, 000 per person.

What could you do with an extra $3, 800 a year? You could take a nice vacation, start a renovation project, make a down payment on a new car, pay down a debt or deposit it in a savings account for a rainy day.

Insurance fraud takes many forms. Here are some examples: · A motorist who didn't have collision insurance could have a crash, call their insurance company to add collision coverage and then claim the wreck occurred after the collision coverage was added.

· Someone could rent a moving truck and stage an accident with a friend. Then they'd fake an injury to collect on the trucking company's insurance.

· A worker could fabricate an injury or exaggerate a legitimate injury to claim additional workers' compensation money.

· A homeowner or renter could sell expensive jewelry to a pawn shop and then file a homeowners' or renters' insurance claim, saying the jewelry was stolen. · A policyholder could misrepresent information on an insurance application to obtain a lower premium. · Someone could create fraudulent healthcare provide invoices on a computer to obtain payments for care they did not receive.

· A provider could bill the insurance company for services not provided, or upcharge for services that were provided.

I've been fighting insurance fraud since the I first took office as your insurance commissioner in 2017. In addition to more than doubling the number of Special Agents investigating insurance fraud and other white-collar crimes, I've hired a team of special prosecutors to work with local district attorneys across North Carolina to prosecute insurance fraud.

Last year, we made 505 arrests, obtained 207 convictions and returned $10.5 million to insurance companies in restitution and recoveries. Here's the kicker: We need your help. If you suspect insurance fraud or other white-collar crimes, don't be shy. You may anonymously report it by calling the Department of Insurance's Criminal Investigations Division at 919-807-6840 or toll free from anywhere in North Carolina at 888-680-7684. You may also report it online at www.ncdoi.gov.