ISSUE: Insurance fraud

OUR VIEW: Insurance fraud makes times tougher for everyone

Amid the reality of higher insurance premiums, understanding the market factors and worldly conditions that drive prices is necessary. Knowing about your policies is as important for ensuring adequate coverage as it is monetary value.

So, too, is it necessary that South Carolinians understand something else about insurance: People try to cheat insurance companies by filing false claims. They cost us all.

Insurance fraud is a felony in South Carolina and can result in jail time.

It costs nearly $120 billion a year, with health care fraud at $85 billion a year and property and casualty insurance fraud at $30 billion a year, Insurance Information Institute statisics indicate. Each year consumers spend about $300 per household just in additional insurance premiums, according to the National Insurance Crime Bureau.

The South Carolina Insurance Fraud Investigators, Attorney General Henry McMaster, and the South Carolina Insurance News Service are continuing their initiative to fight insurance fraud and increase public awareness of insurance fraud and public participation in fraud prevention.

Last year there were 712 insurance fraud complaints received by the Insurance Fraud Division from throughout South Carolina. The total amount of insurance fraud reported was nearly $8.4 million. Nearly $400,000 in fines and restitution were ordered paid by the courts. In addition, nearly $150,000 in civil penalties and civil restitution was paid. This brings the total to more than $74 million in insurance fraud reported and nearly $6 million in monies collected since the South Carolina Attorney General’s Insurance Fraud Division began prosecuting insurance fraud cases in 1995.

While there are organized fraud rings throughout South Carolina, other people you wouldn’t suspect, such as a next-door neighbor, co-worker or close acquaintance, are also the causes of insurance fraud and increased insurance premiums.

And times may be particularly conducive to the problem.

The amount of life insurance fraud and personal/commercial property insurance fraud reported increased in 2007. Nearly $3.5 million in life insurance fraud was reported in 2007 compared with more than $700,000 in 2006. The amount of personal/commercial property insurance fraud reported in 2007 was just under $2 million and was only $974,027 in 2006.

As noted by Jody Parker, president of the South Carolina Insurance Fraud Investigators: “The recent downward trends with the economy, the issues with adjustable-rate mortgages and gasoline costs have also been reasons for some to try to escape their financial obligations with their lenders by cashing in on the insurance proceeds.”

Disturbingly, the experts contend that about one in four people believe it is OK to “pad” an insurance claim. It’s not!

Stopping these insurance crimes stands to benefit all. Reporting fraud when you see it or suspect it is necessary.

The South Carolina Insurance Fraud Hotline, 1-888-95-FRAUD, is available 24 hours a day, 7 days a week for confidentially reporting insurance fraud. Use it if you have information.

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