FOR IMMEDIATE RELEASE
Economy Feeds Insurance Fraud Epidemic
Phoenix, Ariz., March 23, 2009. The struggling economy and the staggering number of home foreclosures appears to be translating into a surge in the rate of insurance fraud claims referred for investigation, according to AAA Insurance.
In the end, honest policy holders are historically forced to cover the cost of the crime. Locally, insurance fraud costs honest policy holders as much as $200 per month in premiums, according to the Arizona Department of Insurance. The crime is estimated to cost insurance policyholders nationwide more than $100 billion annually, according to the state agency. National agencies are also tracking a rise in serious cases. The National Insurance Crime Bureau reports a 14 percent increase in organized insurance fraud in Arizona between 2006 and 2008. And NICB recently found that Arizona is No. 10 in the top 10 states for questionable home claims.
Arizona’s ranking as one of the top states in the nation for foreclosure has reflected on the overall economy, and contributed to a growing number of insurance claims being referred to investigators for auto, home and other policies, AAA Insurance experts report.
In addition, theft of appliances, fixtures and other home possessions from foreclosed homes by former owners can result in insurance claims from lenders who assume ownership of the property. These cases are often handled as vandalism by insurance companies.
“While many cases of insurance fraud stem from citizens who feel they are simply exaggerating the facts to help pay deductibles, insurance fraud is by no means a victimless crime,” said Brad Oltmans, vice president of insurance services for AAA Arizona. “What these individuals fail to realize is that they are committing a crime that affects all policy holders.”
The good news is that consumers can play a big role in preventing this crime. AAA Arizona is encouraging consumers to take a stand against insurance fraud during March, which is Fraud Month, and year-round.
The best defense consumers can take against insurance fraud is to be aware of what it is, make an effort to avoid it and to report it when they are aware of it taking place. Another way to combat this problem is follow the below tips from AAA Insurance:
- Form a neighborhood watch to keep an eye on all abandoned and foreclosed homes. Neighbors who witness a burglary or suspicious activity around an abandoned home should immediately contact their local police department.
- Know that your report can make a difference. If you do witness or are approached with a fraud scheme of any kind, report it! Call the Arizona Department of Insurance Fraud Unit at 602.912.8418 and keep your records of the incident. Your report can be enough evidence to initiate an investigation.
- Be aware of possible fraud schemes. If you are involved in an accident and are approached by someone who suggests a doctor or lawyer who can help you “make money” or by a mechanic who offers to “bury” your deductible by inflating the estimate, do not accept, as it’s likely fraud.
- Report accidents and losses to the police, whether you are involved or are a witness. If involved, let your insurance company know, regardless of who was at fault. Your report is important to establish the legitimacy of your claim, as well as to determine if claims made by others are fraudulent.
- Record pertinent information. If you are involved in an auto crash, keep a record of what happened and what was said. Get the names and phone numbers of all involved parties, passengers and witnesses, and the names of their insurance companies. Keep a disposable camera in your glove compartment so you may take pictures of any damage to vehicles immediately after a collision.
AAA Arizona, the Arizona affiliate of AAA, provides automotive, insurance and auto travel services to nearly 800,000 Arizona members. Annually, AAA’s Emergency Road Service responds to more than 450,000 calls for help on the streets and highways of the state as well as providing insurance, travel, and financial services to AAA members and motorists. Since its founding in 1927, AAA Arizona has been a leading advocate for the safety and security of all travelers. AAA can be visited on the Internet at www.AAAAZ.com.
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Editor’s Note: Insurance expert available for interviews. To schedule, contact AAA Public Affairs. |
