Insurance-Related Crimes

• Billions of dollars are picked from American pockets each year by what many people consider a "victimless" crime.
• Insurance fraud is one of the most costly white-collar crimes in America, ranking second to tax evasion.
• To the insurance industry, insurance fraud has destructive capabilities that exceed even Hurricane Katrina, the most costly disaster in U.S. history.
• The National Insurance Crime Bureau (NICB) estimates that property/casualty-based insurance fraud costs Americans $30 billion in damage.
• Adding other insurance lines to the equation, like health, life and specialty insurance, the total cost of insurance fraud may exceed $100 billion per year.
• According to the NICB, 10 percent of property/casualty insurance claims are fraudulent.

Who pays for insurance fraud?

• Insurance companies, policyholders, taxpayers and the general public pick up the tab through increased insurance rates, higher taxes and inflated prices for consumer goods and services.
• Ultimately, you pay the price for insurance fraud. The NICB estimates that the average American household pays $200 to $300 a year in additional premiums to make up for fraud.

Forms of insurance fraud

• Staged auto accidents: Some people actually cause collisions to collect insurance payments for accidents that are nonexistent or greatly exaggerated.
• Slip-and-fall accidents: Small business and fast food restaurants are often the targets of this type of insurance fraud. Injuries may be nonexistent or exaggerated.
• Medical provider fraud: Some medical providers bill your insurance company for treatments not performed, or they misrepresent the true cost of the procedure.
• Workers compensation fraud: Some people falsely claim to be injured on the job when they were actually injured outside of the workplace. Other incidents include workers who exaggerate an on-the-job injury and collect benefits while working a second job.
• Agent fraud: Insurance agents collect premium payments and do not forward them to the insurance company responsible for paying claims, thus leaving the client uninsured.
• Phantom repairs and estimates: Dishonest auto body shop owners offer to inflate the extent of damage done to a vehicle in order to cover the deductible. The result is overbilling the insurance company responsible for payment.
• Owner give-up fraud: An individual reports a vehicle stolen to collect insurance, when actually it has been sold - often outside of the country - at an inflated price. In other owner give-ups, the vehicle is sold to chop shops for parts.
• Arson-for-profit: An owner deliberately burns - or hires someone to burn - a property or vehicle and then collects insurance.
• Policy misrepresentation: Some individuals knowingly misrepresent themselves on an application to obtain lower premiums.
• Multiple policies: An individual buys several policies to insure the same property, and then reports that the item is stolen or destroyed, and the person collects on all of the policies.

• Always remember that if it sounds too good to be true, it probably is.
• Deal only with licensed agents and companies.
• If you have any doubt, call the North Carolina Department of Insurance, Consumer Services Division, in order to confirm if an agent company is properly licensed, or if you have an insurance related questions.
• If an agent becomes evasive or does not explain things to your satisfaction, seek other assistance or consider going elsewhere for your insurance needs.
• Do NOT sign any blank application or claims forms.
• NEVER pay premiums in cash.
• Keep all your records and proof of payments.
• Report insurance fraud to the Investigations Division of the North Carolina Department of Insurance.

AM I AT RISK IF I REPORT INSURANCE FRAUD?

NO, you are not.  Reporting insurance fraud in North Carolina in good faith exempts you from civil liability per the North Carolina General Statutes.  That means that no one can take adverse action against you for reporting what you reasonably believe to be insurance fraud.  It is important to know that you can report information ANONYMOUSLY as well.

North Carolina Arson Statistics 2006 by City

Source: FBI Uniform Crime Reports 2007.

Stolen Vehicles

North Carolina MotorVehicle Theft By County

Source: County Offenses, Crime in North Carolina 2008, North Carolina State Bureau of Investigation

North Carolina Motor Vehicle Theft in Cities With Populations Over 10,000

Source: FBI Uniform Crime Report 2007.

Vehicle Theft Rates By State - 2002-2004

Source: FBI Uniform Crime Reports 1999-01.