Thursday, January 24, 2013
A new report from the National Insurance Crime Bureau (NICB) has found a strong correlation between organized crime and staged auto accidents.
Covering the period from January 1, 2008, through June 30, 2012, analysts reviewed 13,014 questionable insurance claims.
Questionable claims (QCs) are claims that NICB member insurance companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud. A single claim may contain up to seven referral reasons.
For this report, just QCs with a referral reason of â€œorganized group/ring activityâ€ (OGA) were identified.
Overall, there were 13,014 OGA QCs referred to NICB during this period. The top five states that generated the most were: Florida (3,530), California (2,679), Michigan (1,080), Texas (1,050) and New York (765).
The top five cities generating the most were: Los Angeles (752), New York (595), Miami (575), Detroit (545) and Tampa (545).
The insurance policy type most represented in the NICB analysis was â€œpersonal automobile,â€ accounting for 10,659 referrals. NICB says:
Further proof of this connection is evident when looking at these QCs by loss type. The referral reason most often coupled with the OGA referral was by far â€œstaged/caused accidentâ€ â€” indicated 4,347 times. The loss type with the most referrals was bodily injury with 4,401 referrals.
The results of this QC analysis correlate with what NICB agents and analysts are seeing in their casesâ€”particularly in the no-fault, personal injury protection (PIP) states like Florida, Michigan and New York.â€
The NICB defines organized crime groups as â€œany specific group made up of entities and/or individuals who systematically and repeatedly conduct pre-planned activities for the purpose of generating fraudulent insurance schemes.â€
Staged/caused accidents are perpetrated by individuals who are skilled in committing insurance fraud. Those â€œaccidentsâ€ set the stage for subsequent acts of fraud ranging from faked or exaggerated injuries to unnecessary or excessive medical treatment.
Check out this I.I.I. backgrounder for more info on no-fault insurance fraud, and insurance fraud in general.