The Real Cost of Insurance Fraud

Insurance fraud is stealing, bottom line. It increases the price of every item we purchase from groceries to motor vehicles.

This multi-billion dollar criminal industry may be committed by your neighbor or your doctor or even a corporation. It is imbedded in every goods and services imaginable and it costs the victim, us, almost $80 billion a year according to the Coalition Against Insurance Fraud.

Break that number down even further and we see that the average American family loses between $400 - $700 per year to insurance fraud according the FBI. This is excluding the amount of dollars we lose from health scams.

Roman’s Special Investigation Unit investigates potential insurance fraud and stops it before millions of honest dollars are in the hands of fraudsters’ pockets.

Insurance schemes range the gamut from workers’ compensation, property damage, auto claims and health crime.

There are even fake insurance companies and corrupt agents who sell fake policies to unwitting consumers who hand over their money only to be left uninsured and unprotected, states the National Association of Insurance Commissioners.

Every time an insurance crime is committed, the insurer is forced to increase their premiums. This makes the consumer absorb the loss.

Unfortunately, what is hit hardest by insurance rip-offs is Medicare, our federal program designed to insure seniors and people with disabilities. Medicare fraud costs almost $600 billion each year. That is nearly $20 billion more than the country’s annual Homeland Security budget.

Medicare insureds are encouraged to use caution and vigilance when receiving treatment and paying bills, in order to avoid any unnecessary services, gouged prices, or even medical identity theft.

Roman’s investigation teams are dedicated to uncovering fraud with the goal of saving insurers from forfeiting massive payouts.

The laws and penalties against insurance fraud changes from state-to-state. Forty-eight states consider insurance fraud a crime. The degree of punishment for this crime varies from fines and/or jail time.

For instance, Article 176 of the State of New York’s Insurance Fraud penal code identifies five degrees of insurance fraud and penalties, which are based on the amount stolen; fifth degree insurance fraud is identified as a class A misdemeanor while fourth through first degree are considered class A through D non-violent felonies.

According to the New York State Unified Court System, Class A misdemeanors are punishable by up to 364 days in jail and/or a $1,000 fine, or double the amount that was gained from the crime. Class A through D felonies are punishable by fines from $1,000 to over $1,000,000 and/or four to 25 years in state prison.

Out of the 48 states that consider insurance fraud a crime, 42 states plus Washington D.C. have dedicated insurance fraud bureaus. Forty-three states plus D.C. require insurance companies to report suspected fraud to their state.

The number one way to reduce insurance crime is to mitigate individuals from inflating insurance costs on property damage, falsifying workers’ compensation claims and more. This can be through investigation or to reporting this crime to insurance companies and government agencies.

From investigation to litigation to conviction, Roman’s teams are experienced in mitigating the prevalence and costs of insurance fraud for both companies and individuals.

Insurance fraud is not a victimless crime. It continues to strike the pockets of every individual.


Sources:

AARP: https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html

Coalition Against Insurance Fraud: https://insurancefraud.org/fraud-stats

FBI: https://www.fbi.gov/stats-services/publications/insurance-fraud

National Association of Insurance Commissioner: https://content.naic.org/cipr_topics/topic_insurance_fraud.htm

New York State Unified Court System: https://www.nycourts.gov/judges/cji/2-PenalLaw/176/art176hp.shtml

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