Insurance Fraud — A Disturbing Survey

The University of Georgia is interested in insurance fraud. The FBI says it’s an issue that, every decade, costs the average family $4,000 to $7,000 in premiums.

The university recently looked at data gathered by the Coalition Against Insurance Fraud. The coalition questioned 1,500 people about insurance fraud and asked them to comment on different scenarios. Will they go along? Will they participate? Or will they ignore the ongoing crime and go about their business?

The responses are surprising — and concerning.

• 40% of those 25 to 34 said they are okay with the fraud
• Just 5% of people 55 and up were okay with the fraud
• 38% said would, or might have, committed fraud collected damages from insurers
• 22% say they know someone who has done this
• 34.3% admit to adding older damages to a current auto insurance claim

Brenda Cude is the lead author of the study and a professor emerita for UGA College of Family and Consumer Sciences.

“Many people, especially younger people, have an adversarial relationship with insurance companies,” she said. “If you’re pushed into a position of thinking you need to fight, maybe that pushes people into actions that they wouldn’t otherwise consider, especially if they’re not aware that it’s technically illegal. There are lots of major consequences that could come from that.”

Here are more incidents that people say they have done, or would do:

• 31.2% say they’d leave out information to get better coverage or a lower premium
• 30.7% add items to a claim that might not be a part of the incident
• 29% give insurers misleading information to get coverage
• 28% falsify an address and say they live in an area with lower insurance premiums
• 27% purchase insurance after a crash, or an incident
• 27.2% file a work comp claim for an injury that didn’t happen at work

The study suggests that a solution to the fraud problem and its acceptance among younger people is to note to them that fraud causes rates to rise, and that affects them

“A better understanding of insurance underwriting and claims investigation practices would directly affect knowledge and also influence attitudes and behaviors, which are critical as all three are components of financial literacy,” the study concluded.

Source link: PropertyCasualty360.com — https://bit.ly/3Kgpwkm