Post Date December 8, 2013 - The number of false and suspicious auto insurance claims has tripled over the last year according to car insurance claims data submitted to the National Insurance Crime Bureau (NCIB).
Auto Insurance Claims Fraud Targets No-Fault Auto Insurance States
Auto insurance companies are also finding from NCIB data, there has been an increase in those exaggerating the size of legitimate auto insurance claims. They have found this specifically in personal injury auto insurance claims in the recent years. Since 2008, the NCIB had declared the number of fake auto insurance claims have tripled, among the states with larger auto insurance markets.
According to the Insurance Federation of Minnesota, the surge of fraudulent personal injury claims in the state is due to the crackdown being implemented on other states with no-fault insurance which have drove off fraudsters to Minnesota. Auto insurance claims fraud has increased as more organized crime factions get involved. These groups are setting up fake health clinics as a outlet for staged vehicular accidents or to have a legitimate clinic to submit fake auto insurance claims and medical bills for accidents which never existed. They also use the clinics to submit a legitimate claim to 10 different insurance companies.
A lawyer in Minnesota who had represented Auto Insurance Companies in these fraudulent cases says there are a number of auto insurance claims rings which staged accidents. These rings are responsible for more than 200 or more false auto insurance claims which did not even occur.
The State of Minnesota offers a no-fault personal injury protection (PIP) on auto insurance policies. It is required in the state. No-fault auto insurance has been targeted by fraudsters as it generously pays for the injuries incurred in a vehicular accident notwithstanding whose fault was it. Minimum no-fault Minnesota auto insurance coverage is $40,000, half of which is intended for a person’s medical expenses while the other half is for non-medical expenses intended to the injured person.