Community involvement is an effective deturant in the battle against auto insurance fraud. This has been proven true in the city of Lawrence, Massachusetts which has been earlier dubbed as the “auto insurance fraud capital” of the state.
Initiating a massive crackdown against fraud by engaging communities through a task force called as Community Insurance Fraud Initiatives or CIFIs, the Insurance Fraud Bureau and the Automobile Insurers Bureau (AIB) of Massachusetts reported that around $875 million has been saved in premiums that could have been shouldered by consumers in the said state. The crackdown according to the AIB has been initiated prompting the death of a 65-year old woman from Lawrence who was involved in a staged accident intended to defraud auto insurers in 2003.
Since 2003, and with the help of the CIFI anti-fraud model, 488 people in Lawrence had already been charged for defrauding Massachusetts auto insurance. The crackdown also led to the charging of 1,900 people across the said state.
As the battle against insurance fraud intensifies, the city of Lawrence today has been able to have $68 million in premium savings, with average premiums dropping to $1,260 in 2011 from $1,613 in 2003.
Massachusetts has a generous no-fault policy which had become an easy target of fraudsters who execute stage accidents in order to collect from insurers. These fraudulent activities have been driving up the auto insurance rates in the said commonwealth.
Today, the Insurance Fraud Bureau of Massachusetts is expanding the scope of the CIFIs to effectively combat fraud throughout the state. It has already proven to be an effective anti-fraud measure in 13 communities where it had been put in place.
More details on the success of the CIFIs in Massachusetts can viewed on the report “Community Insurance Fraud Initiative (CIFI): A Ten Year Retrospective” which can available at the IFB website, www.ifb.org.