Dealing With Fraud

By Author: Marcus Stalder
Total Articles: 491
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It's a sad commentary on our great country that there's an epidemic of automobile insurance fraud. No one likes to think of their country as the home of dishonesty but bankers, top corporate executives and ordinary people have been struggling to justify their behavior. At the top of the heap, this is a challenge to define what ethics they have. Very few senior people are ever prosecuted let alone convicted of a criminal offense. Sadly, those who live lower down in the world are turning to what is more obviously defined as crime. Since we are in the middle of a recession with unemployment remaining stubbornly high, we could explain this by saying crime looks like a good career move. You can decide what hours to work and keep all you get without having to pay tax. Except, the conviction rates for fraud has shown no real movement. This is interesting because we are told that statistics don't lie. Well, perhaps "lie" is too strong a word because it's very clear this is not the whole truth. If you look around all the states in the union, they are all struggling with deficits. If budgets have to be balanced and taxes cannot increase, ...
... the only choice is to cut spending. Since this includes the police, decisions have to be made on how to spend scarce resources. Strangely, most police forces stopped considering fraud a serious crime years ago.

The failure of police forces to investigate fraud seriously has two important consequences. First, everyone considering the career move into crime is encouraged by the good chances of getting away it. Put the other way round, nothing deters potential criminals more than the certainty they will be caught and punished. Second, the insurers do little to identify and investigate suspicious claims. This means employing an army of claims adjusters. Labor costs money. It's cheaper for the insurers to pay the majority of the claims and increase the premiums to stay in profit. To reinforce the message, all we honest folk who pay our insurance premiums have to pay more to cover all this fraud.

Well, how much fraud is there? Actually, no one knows for sure but what we do know is that Florida is the number 1 state for fraud. When it comes to staged accidents and fake medical claims, Florida produces 30% of the total of questionable claims for the whole of the US. For the record, New York is in second place with 16% of total claims. The result is that Florida has the second highest premium rates in the US. Now you see the price paid by ordinary drivers when their auto insurance quotes come in.

This is a bad situation. The insurers have no real incentive to clamp down on fraud. The police do not investigate. The courts do not convict and impose deterrent sentences. We all accept fraud as a fact of life and end up weeping every time the next auto insurance quotes arrive. It should not be this way. Every time a claim is classed as suspicious, there should be an investigation. If fraud is suspected, it should be routine to pass the file on to the police to complete the investigation. That way, we all pay lower premiums to insure our vehicles.

To read more of Marcus Stalder's comprehensive investigations on different subjects visit http://www.insurswebsite.com/articles/car-insurance-quotes.html, where he frequently writes form making people aware of more things in the world.