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Questionable insurance claims on the rise

Questionable insurance claims rose over 52 percent in the first half of 2010, according to a group dedicated to raising awareness about the cost of insurance fraud.

To increase awareness about this crime, Governor Jennifer Granholm has declared October 10-16, 2010 as Insurance Fraud Awareness Week in Michigan.

“Many people wrongly believe that insurance fraud is a victimless crime,” said Lori Conarton, Communications Director, Insurance Institute of Michigan. “However, they are wrong.  We all pay for this crime through our insurance premiums.”

A study by the National Insurance Crime Bureau found that questionable claims for excessive medical treatment, auto glass claims and staged accidents all rose significantly during the first six months of 2010.

It is estimated that one out of every 10 claims is fraudulent.  “In Michigan that translates into about $3 billion annually being picked from our pocketbooks,” Conarton said.

Insurance fraud is a felony in Michigan. Those convicted of fraud can be jailed up to four years and/or fined up to $50,000 and ordered to pay restitution.

To combat insurance fraud in Michigan, insurance companies are establishing Special Investigative Units (SIU) which train insurance personnel to identify suspicious losses.

Here in Michigan, residents are encouraged to fight back against this insurance fraud by reporting it.

Through the Michigan Arson Prevention Committee, rewards up to $5,000 are paid to persons who provide information that leads to the arrest and/or conviction of arsonists.  The number for reporting these crimes is 1-800-44-ARSON (800-442-7766).

The insurance industry is also involved in a program that pays for information leading to the arrest and warrant of auto thieves and chop shop operators.  Citizens can call the tip line at 800-242-HEAT (Help Eliminate Auto Thefts) with information on stolen cars and suspected auto theft activities.  HEAT tips are rewarded with up to $1,000 each for information that leads to the arrest and warrant of individuals suspected of auto theft, auto theft related insurance fraud and/or auto theft related identity theft. Up to $10,000 is available for tips that result in the arrest and binding over for trial of suspected theft ring members and/or chop shop operators. In addition, HEAT provides a $2,000 reward for the arrest and warrant of a carjacking suspect.

The National Insurance Crime Bureau (NICB), a not-for-profit organization that receives support from over 1,000 property/casualty insurance companies also has investigators in Michigan.  The NICB partners with insurers and law enforcement agencies to facilitate the identification, detection and prosecution of insurance criminals.  Anyone who suspects insurance fraud can call NICB at 1-800-TEL-NICB.  Callers are eligible for rewards.

The Michigan Insurance Fraud Awareness Coalition was formed in 2009 to fight back against this crime.  Members are: Michigan Chapter of International Association of Special Investigation Units, Insurance Institute of Michigan, National Insurance Crime Bureau, Coalition Against Insurance Fraud and Michigan Arson Prevention Committee.  For tips on how to prevent insurance fraud, visit the Coalition’s website www.michiganinsurancefraud.org.  Join its community on Facebook.

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