Insurance fraud hall of shame

Doctors and dentists do it. Judges do it. Even little old ladies do it. Welcome to the 2008 Insurance Fraud Hall of Shame, a dirty dozen of “America’s most brazen, vicious or plain klutzy insurance crooks.”
Insurance fraud is a crime that is estimated at as much as $80 billion a year – some would put the figure higher. Unfortunately, honest people pick up the slack for cheaters and criminals in the form of higher insurance costs. While few would argue that organized criminal scams to bilk insurers – often also harming other individuals in the process – constitute fraud, the public has mixed opinions about so-called “soft fraud.” Soft fraud might be intentionally padding the value of losses in a homeowner’s claim or underestimating the number of employees on payroll for workers comp. Various surveys on the public attitude to insurance fraud taken over the years have shown that many people – possibly as many as one in three – think that type of soft fraud is OK. In a recent survey in Great Britain, 4.7 million people indicated that insurance fraud is more acceptable now because of the challenging economy. But this type of fraud adds very real dollars to the amount we all pay in premiums for our insurance coverage.
Don’t be an insurance fraud victim
Besides paying higher premiums, fraud can hurt individuals in many ways. Staged car crashes injure and kill innocent victims. Employers who fail to carry workers comp mean jeopardizes benefits for employees who are injured at work. Identity fraud hurts innocent people’s credit and their reputations.
Here are some steps you can take to avoid being an insurance fraud victim:

  • Know who you are dealing with. Use only licensed agents and licensed insurers. Contact your state insurance bureau if in doubt.
  • Shop around. Ask your agent to get more than one quote.
  • Don’t pay premiums in cash. Get a receipt for payments.
  • Get a written copy of your insurance policy and review it. Yes, even the fine print.
  • Don’t sign a blank form.
  • Don’t accept “on the spot” cash for an accident.
  • Be leery of any “helpful” strangers who surface at the scene of an auto crash who offer advice on body shops, doctors, or lawyers.
  • Get detailed bills for any repairs or medical services.
  • Keep that old adage in mind: “If it sounds too good to be true, it probably is.”
  • Be guarded about giving out your Social Security number – don’t give it out to anyone you don’t know.
  • Check with your state insurance bureau to be sure your employer has workers compensation insurance that would protect you in the event of an on-the-job injury.
  • If you don’t understand something or question the validity of something, don’t be afraid to check with your state’s insurance bureau.
  • Report fraud when you see it.

Helpful resources:
State insurance department links
State fraud bureau links