Welcome to a new series on our blog – entitled This Week in Insurance, which will feature both consumer and general industry news.
According to a news release from April 26, the NC Department of Insurance (NCDOI) advised that the son of a State Farm policyholder placed a fraudulent claim resulting in a $4,156 payout was arrested on April 25.
David Hartsfield of Raleigh called State Farm on November 28, 2011 and purported that he was involved in an accident with injury and damage to his car. It is unclear whether David Hartsfield was listed as a driver on his father’s policy and made the claim as the driver or if he pretended to be his father when he placed the claim.
His trickery was discovered when a State Farm representative called to confirm settlement and reached Hartsfield’s father who claimed to have no knowledge of the accident. As a result, Hartsfield landed in jail at Wake County charged with obtaining property by false pretense and is under a $3,000 bond.
In Florida, a large auto insurance fraud ring was shut down Wednesday, April 25, after a yearlong police investigation in the Little Havana section of Miami as reported by the Miami Herald in a press release.
The core of the investigation commenced when a “runner” involved in the scam recruited an undercover officer to stage injuries in an auto accidents and place fraudulent Personal Injury Protection (PIP) claims. Thirteen people were arrested; among them were therapists and doctors. The culmination of the investigation also shut down three Miami-Dade health clinics. Grand theft, insurance fraud, and organized fraud are some of the charges brought against them.
These are examples of two extremes of insurance fraud: One small claim by an individual and large claims by a fraud ring.
NCDOI claims since Wayne Goodwin became Insurance Commissioner in 2009, fraud investigations recovered over $48 million in NC alone.
The Insurance Research Council estimated $6.8 billion was paid out in 2007 for fraudulent auto claims. Along with those numbers, The National Insurance Crime Bureau (NICB) estimates fraud adds between $200 and $300 dollars of insurance premiums a year to every insured individual.
None of these statistics takes into account the cost on the community through law enforcement and emergency services, who investigate and help with accidents, or the drain on the court system.
Insurance fraud hurts everyone. Law enforcement and insurance companies ask citizens to be vigilant and report any suspicious behavior in regards to auto or homeowner insurance claims by friends, neighbors, or relatives. NICB provides an anonymous tip line
at 1-800-TEL-NCIB if you suspect insurance fraud.
Our comment: Protect yourself, stay safe, don’t game the system – it could mean lower rates to all of us.
