In a targeted effort to reduce the number of fraudulent auto insurance claims that drive up premium costs for residents of Springfield and Holyoke, Mass., a task force has been formed that combines the resources of the Insurance Fraud Bureau of Massachusetts, the Springfield and Holyoke police departments and the Hampden County District Attorney’s Office to focus on the problem.
As part of the anti-fraud initiative, a public awareness advertising campaign has been launched utilizing billboards in both cities and ads in local newspapers. The ads offer a $5,000 reward from the Insurance Fraud Bureau for information leading to the arrest and conviction of perpetrators of auto insurance fraud.
Springfield and Holyoke are among the communities with the highest rates of auto accidents and injuries in Massachusetts and, consequently, among the highest costs for auto insurance. In 2002, the statewide average injury rate was 43 injury claims for every 100 accidents; by comparison, in Holyoke 100 claims were filed per 100 accidents that year, while Springfield’s rate was 92 claims per 100 accidents.
“The IFB will dedicate two full-time investigators to this effort in the Springfield and Holyoke area and will partner with the police departments here to bring the full effect of the IFB’s resources and databases to your local community,” said Daniel J. Johnston, executive director of the Insurance Fraud Bureau. “We are pleased to be able to bring this program to the Springfield/Holyoke area, and we recognize that this is not a one- or two-month project. We are dedicated to maintaining it into the future.”
The anti-fraud campaign in Springfield and Holyoke is modeled after a similar cooperative initiative launched in Lawrence last Fall, following the death of a 65-year-old Lawrence woman in an auto accident that allegedly was staged so the occupants of the vehicles could file fraudulent insurance claims for bodily injuries. Under Massachusetts’s no-fault insurance system, bodily injury claimants can file a lawsuit for pain and suffering if their medical expenses exceed $2,000.
To date, the Lawrence task force – comprising the Insurance Fraud Bureau, the Lawrence Police Department, the Essex County District Attorney’s Office, the Massachusetts Attorney General’s office and several insurance companies – has been responsible for the arrests of 38 people on insurance fraud charges, one of whom was recently convicted and sentenced to a year in prison.
“In Lawrence, we have seen nearly a 40 percent reduction in the number of police-reported accidents, and this translates into millions of dollars of fewer insurance claims coming from that city,” Johnston said. “The long-term benefit, of course, is lower insurance rates for those in the Commonwealth who bear the brunt of paying for this serious economic crime.”
Established in 1991, the Insurance Fraud Bureau of Massachusetts is the only investigative agency of its kind in the country that is privately funded by the state’s insurance industry. It refers cases of suspected criminal insurance fraud to local, state and federal law enforcement agencies and prosecutors.
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