In general the proposed rules give insurance companies much more leeway when it comes to handling what it suspects are fraud cases. For example, one proposal is to make it easier for insurance companies to dispute health care charges that exceed appropriate free schedules. In another proposal the insurance company would be allowed to suspend medical payments related to the insurance claim if fraud on the part of the medical clinic is suspected.

The New York State Insurance Department has been working hard to find ways to reduce auto insurance fraud because consumers pay higher rates than would be required if fraud was lessened or eliminated. Currently New York Drivers are paying the second highest auto insurance rates in the United States. The cost of fraud cases is passed on to consumers through insurance premiums and is often called a fraud and waste tax.

No fault automobile insurance coverage allows a victim of a car accident to file claims with his or her own insurance company to collect medical payments and lost wages. It does not matter who caused the accident and thus the no-fault designation. But some of the costs of the no fault claims is related to court cases involving disputed medical claims.

The proposed regulations would make changes to the medical forms so insurance companies are better able to determine legitimate claims. This could speed up the settlement of legitimate claims. Some of the proposed regulation changes benefit the insured directly. For example, auto insurers would have to schedule medical exams for the insured so the exams are conveniently located and at reasonable times.

Another proposal is to increase the maximum attorney fee so the insured can be adequately represented. A minimum attorney fee would be eliminated in an effort to promote consolidation of claim cases.

Fighting waste and fraud with regulatory changes in the New York auto insurance industry is important if consumers want to see their insurance premiums contained over the coming years. The New York State Insurance Department has a fraud division that specializes in investigating fraud cases. Some of the fraud cases are instigated by organized groups that involve medical clinics and even attorneys and they operate throughout the state.

The changes to Regulation 68 are still in the draft stage and comments from the public are welcomes. It is expected that most changes as proposed will be adopted along with others being suggested. The consumer is likely to benefit once that happens as auto insurance costs are contained in the state of New York.

New York Making No Fault Auto Insurance Changes To Reduce Fraud is a post from: Peppercoin Insurance

For example, the fraud division handled 2,600 auto insurance fraud cases. Consumers should be concerned about this because fraud can lead to higher insurance expenses that are passed on through increased rates for all customers.

The State of Maryland has told consumers they don’t need to be concerned about the rising number of auto insurance fraud cases because the fraud division is investigating all reports. Of the 2,600 fraud cases, 1,300 of them were referrals.

In other words, they were reports of fraud sent to the fraud division. Because all reports of fraud are investigated the potential impact on insurance premiums is minimized since money will be recovered in many cases as a result of state investigations.

Auto insurance fraud can take many forms. For example, trying to charge an insurance company for auto damages that were not incurred as a result of a covered accident is fraud. Another type of fraud is called a “give up”. A give up is when an insured drive reports a vehicle is stolen when in truth it was not.

Why is the number of auto insurance fraud cases rising? The reason in Maryland and in other states seems to be the ongoing recession. According to Henneman, people committing auto insurance fraud are doing so to obtain money. With the economy in such poor condition and unemployment rising, many consumers are having cash problems. They pay their premiums for years and some begin to tell themselves it is time for the insurance company to return some benefits.

This kind of thinking leads to insurance fraud. For example, there have been cases of people setting old autos on fire and then filing a claim

Maryland has a progressive fraud reporting system which is why the state reassures consumers worried about higher premium they have little to worry about. Insurance companies can enter information about suspected fraud into a national online database. The information is then sent to the appropriate state for investigation. Being able to input information into a database speeds up the investigation process considerably.

There are 46 states that currently use the national secure database system for suspected fraud reporting. The Maryland Insurance Administration also participates in the Washington Area Vehicle Enforcement program and the Baltimore Regional Auto Theft Task Force.

When the recession started, law enforcement officials across the nation told the public that they expected to see an increase in many crime categories. When money is tight and unemployment is high, people get desperate. As the old saying goes: desperate people do desperate things.

The 2,600 auto insurance fraud case number is an estimate because cases are still being investigated. Some may turn out to be legitimate.

Fraudulent Maryland Auto Insurance Reports On The Rise is a post from: Peppercoin Insurance

More than 60% of all the cases of fraud reported to the California Department of Insurance have been related to automotive insurance. These fraudulent schemes would have resulted in over $182 million worth of total losses for California auto insurance providers, had they not been detected and reported.

In Sacramento County, the seat of California’s state government, the total money nearly lost auto insurance fraud amounted to $5.6 million between 2007 and 2008. Between 2006 and 2007, that figure was at $5 million. The year prior to that, it had been $5.8 million, with 788 reported and prevented cases of fraud.

The figures fluctuate. However, ultimately, honest policyholder are the ones who end up paying for the fraud. When auto insurance provider lose money from fraud, they raise their rates across the board, to compensate for the losses.

Poizner went on to detail the three main types of auto insurance fraud operations that motorists were likely to see: the panic stop, the start-and-stop, and the swoop-and-squat. Poizner explained that the people who deliberately create automobile accidents in order to profit from insurance tend to target pricy cars, commercially-operated vehicles (such as commercial trucks or buses), or cars and other motor vehicles owned by state and local government institutions. Schemers target these types of vehicle because they are almost certain to be possess far-reaching insurance coverage.

Poizner told motorists to look out for accidents in which one of the cars causes an accident by halting unexpectedly. Other warning signs include a car full of passengers involved in an accident, in which all the passengers and driver report being hurt without significant destruction inflicted upon their vehicle.

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Commissioner Warns Californians Of Auto Insurance Fraud is a post from: Peppercoin Insurance

The amount of these claims has jumped to 70% over the last four years which is alarming to industry experts. Largely due to a record amount of consumer debt and the lack of available credit lines this jump translates to 24,000 false claims from the 14,000 recorded four years ago.

Other numbers bring the current credit crunch into a new perspective. According to estimates fraudulent insurance claims are up to about ₤5 million a week and this number only reflects auto insurance claims and not other forms of insurance. Other fraudulent claims involving other areas beside auto is estimated at being around 90,000 claims made in 2007 alone.

Whether this trend is being seen in other countries and with other insurance companies is as of yet unknown but the instances in the U.K are surely to become more of a trend.

With the credit crunch in full gear many consumers are finding it impossible to find a reasonable line of credit or to refinance or even achieve a mortgage in general. This is leaving many without a way to meet sudden and unexpected bills. This is a primary cause of the fraudulent claims.

Many expect false claims to continue rising as the months progress and prices like food and gas increase. This can mean higher premiums for those honest drivers who may already have a hard time meeting bills on time.

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Drivers Turn To Fraud To Help Make Ends Meet is a post from: Peppercoin Insurance