Ripped off: Insurance fraud costs NW households $200-$300 a year

SEATTLE - You're being robbed and you may not even know it. The crime is insurance fraud, and it costs every Northwest household between $200 and $300 each year in higher insurance premiums.

Overall fraud costs
A recent study conducted by the National Insurance Crime Bureau shows property/casualty fraud costs Americans nearly $30 billion each year. The Insurance Research Council says that fraud and inflating the value of claims added between $4.3 and $5.8 billion in auto injury settlements in 2002. The IRC also reports that nearly one-third of all bodily injury claims for auto accidents contained some kind of fraud.

"Some people say they don't care if insurance companies get ripped off," said Karl Newman, president of the NW Insurance Council. "What they're missing is that it's their own money. We all pay for insurance fraud."

Insurance fraud perpetrators steal from Americans in more ways than one. Not only does fraud cause higher insurance rates, it also leads to higher taxes and inflates prices for consumer goods. Keeping that money in your own pocket starts with understanding who commits insurance fraud, and why they do it.

Insurance fraud schemes
Some insurance fraud crimes are elaborately planned schemes such as staged vehicle accidents complete with fake injuries, or claiming phony injuries to collect disability, workers' compensation or personal injury settlements. Others are simply average citizens pretending a car was stolen or that a stereo system cost more than it did.

The National Insurance Crime Bureau offers these facts you should know:

• Insurance criminals are not easily identifiable. They typically don't carry guns or wear masks, but they can be just as damaging as other criminals.
• Insurance fraud includes organized criminal enterprises, unscrupulous doctors and lawyers, dishonest body shop operators and even your neighbor or co-worker.
• Regardless of who they are, insurance fraud criminals are motivated by money and you can help stop them.

"The key thing to remember when we talk about insurance fraud is that we're talking about your money," Newman said. "I don't think anyone wants to pay a higher insurance bill every month so that others can file false claims and then take trips to the Bahamas or live the high life on payouts they don't deserve."

$5000 Award Fund
You can help fight insurance fraud in the Northwest by reporting it. Each year, the NW Insurance Council offers citizens cash rewards of up to $5,000 for information that leads to the arrest and conviction of people who commit insurance fraud. If you know someone who has committed insurance fraud, simply call the National Insurance Crime Bureau (NICB) Hotline at (800) 835-6422. You may choose to remain anonymous and still be eligible for a reward.

For more information about insurance fraud or to request a free brochure, Insurance Fraud: You Pay the Price, call (800) 664-4942, or visit http://www.nwinsurance.org/Insurance_Fraud.pdf.

The NW Insurance Council is a nonprofit, public-education organization funded by member insurance companies.

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