P/C Insurers Report Surge in Suspicious Claims

Property/casualty insurance companies report that the number of claims suspected of possible fraud has jumped 13 percent for the first half of this year compared to last year’s first six months.

A review of suspicious insurance claims referred to the National Insurance Crime Bureau during the first half of 2009 shows increases in nearly all referral categories.

The bureau said suspicious car fires are up 20 percent, suspicious auto glass claims up 76 percent and questionable product liability claims up 90 percent.

A total of 41,619 “questionable claims” were referred to NICB in the first half of 2009 compared with 36,743 received during the same period in 2008. These are claims that NICB member insurance companies refer to NICB for closer investigation based on one or more indicators of fraud.

Property referral reasons showed an overall increase of 20 percent in
the first half of 2009. Hail damage accounted for the largest increase in property referrals, with a 135 percent rise. Fire/arson referrals accounted for the smallest increase with 8 percent.

Casualty referrals showed an overall increase of 15 percent in the first half of 2009.The largest increase was seen in slips and falls, with a 47 percent rise.

Commercial referrals showed an overall increase of 19 percent. The largest increase in commercial referrals was seen in product liability, with a 90 percent rise. Construction/Farm/ Heavy Equipment (not theft) referrals showed the next largest increase with 89 percent. Cargo theft, false/inflated business interruption, vehicle theft and farm loss referrals all decreased.

Duplicate billing accounted for the largest increase in workers’ compensation referrals with a 100 percent rise. Workers’ compensation referrals showed an overall increase of 2 percent.

Vehicle referral reasons shot up 21 percent overall, with the largest increase of 76 percent seen in auto glass fraud.

“While there has been modest improvement within a few categories of referrals, the overall number of questionable claims for the first half of 2009 is 13 percent higher than it was at this time last year,” said Joe Wehrle, NICB President and Chief Executive Officer.

In California, officials recently reported a rise in suspicious auto arson and auto theft fraud referrals in that state.

The National Insurance Crime Bureau, headquartered in Des Plaines, Illinois, is supported by more than 1,000 property and casualty insurance companies and self-insured organizations.

Source: National Insurance Crime Bureau