Insurance Industry Increasingly Targeted by Fraud

03/16/2010

Tough economic conditions have forced many Americans to get creative with their cost-cutting measures.

Some of them are turning to fraudulent activity, with the insurance industry as their target, according to a recent report by the Myrtle Beach Sun News. The report referred to a recent survey conducted by the Coalition Against Insurance Fraud showing that 38 percent of health insurance bureaus experienced a "much higher" incidence of fraud last year than in 2008.

Many victims of these scams unknowingly sign up for insurance that may seem too good to turn down.

"So here you have people in desperate circumstances, and they're getting these faxes that are promising them the moon and complete coverage at low costs and they want to believe it, so they buy it," Insurance Commissioner Kim Holland told the newspaper.

Many of these individuals are unaware that they have worthless coverage - until they try to file a claim, according to the report. The American Trade Association and American Medical and Life Insurance Co. are among the companies that have allegedly scammed consumers out of thousands of dollars.

Individuals hoping to save money on their health insurance can do so by increasing their deductible or opening a health-savings account paired with a high-premium health plan.

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