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Insurance Industry Not Letting Up on Fraud

Insurance fraud is likely to continue confounding law enforcement and affecting policy costs for the foreseeable future, especially with the economic recovery making only slow progress at this point.

With that in mind, the National Insurance Crime Bureau announced this week that it now offers a new text-based service where people can report instances of insurance fraud. By texting "FRAUD" to TIP411, people will be able to file anonymous reports and communicate in real time with a representative of the organization.

Insurance experts have estimated that as many as 10 percent of all claims are rooted in fraud, costing insurance customers and their carriers millions of dollars each year.

On a separate part of its website, the NICB lays out some of the most common forms of auto insurance fraud. For example, offenders commonly abandon vehicles in remote areas and occasionally burn them after reporting them stolen. In other cases, the vehicle is "found" after being reported stolen and the claim is processed.

Other fraud tactics such as staged accidents, which typically involve crime rings, and enhancing minor damage to a vehicle, often from something like hail, are also ways people try to profit from the auto insurance industry and its ratepayers.

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