Insurance Fraud
Insurance fraud - You may think that the topic of insurance fraud is not very interesting and doesn't apply to you, but you should know that people who commit this crime are taking money out of your pocket. The week of Sept. 17 has been declared Insurance Fraud Awareness Week, and the Arkansas Insurance Department is taking that opportunity to inform Arkansans about this costly crime.
Did you know that one in four Americans think it is okay to commit insurance fraud? Or that one in 10 say that they would commit insurance fraud themselves if they thought they would not get caught? Though they would never think of robbing a bank or snatching a purse, millions of Americans think it is okay to steal money from faceless insurance companies. Unfortunately, when they steal from an insurance company, they steal from insurance consumers. It is estimated that in the United States there is 80 to $120 billion lost to insurance fraud every year. That costs each household about $1,000 in additional insurance costs annually.
It is estimated that 17 to 20 cents of every dollar spent to pay out personal injury claims on auto policies involves some sort of misrepresentation or fraud. That means that one in three bodily injury claims in car crashes involves fraud.
There are other costs to insurance fraud. Arson is suspected in half a million fires every year. That is one in every four fires. Insurance fraud is used as a means of providing funds for other illicit activities, including terrorism and illegal drugs. Every year innocent people are hurt or killed in intentional car wrecks where the intent is to defraud insurance companies.
The most common cost of insurance fraud is the millions of Americans who cannot afford insurance and often go with serious untreated medical conditions. Every year people die because they could not afford the insurance that would provide essential medical care. To the family of those lost due to lack of access to medical care, their loss is just as real as those who lost a loved one in a murder-for-hire scheme. These people are victims, too.
Because of the cost of insurance fraud, governments, insurance companies and private organizations have stepped up their fraud abatement programs. Ten years ago, Congress allocated an additional $548 million over seven years to fight health care insurance fraud. A majority of states have now passed statutes directed at insurance fraud and have created fraud bureaus dedicated to the singular purpose of investigating and prosecuting insurance fraud. The FBI has stepped up its insurance fraud efforts to combat terrorism financing. The Treasury Department, through the Patriot Act, has implemented guidelines requiring anti-money laundering and fraud prevention efforts for certain insurance companies.
Arkansas is among the states that have taken a direct approach at combating insurance fraud. In 1997 we passed a law creating what is now known as the Arkansas Insurance Department Criminal Investigation Division. In 2001, the legislature gave that Division law enforcement status.
Currently the Insurance Department's Criminal Investigation Division has seven investigators with a total of 150 years of combined law enforcement experience. The Division also has four attorneys who serve as Special Deputy Prosecutors in several judicial districts where they prosecute cases. Due to the efforts of this Division, more than $7 million has been recovered that would otherwise have been lost to acts of insurance fraud.
However, the Division cannot combat fraud alone. They need your help. If you know of an instance or suspect insurance fraud has been committed, call CID toll free at 888-660-0888 or visit their Web site at www.fightfraud.arkansas.gov. Your tip could stop criminal activity and save you money.
http://www.arkansas.gov/governor/newsroom/index.php?do:newsDetail=1&news_id=220