Monday, 27 June 2016

Insurance fraud is prevalent in Michigan

Insurance fraud is prevalent

Insurance fraud is prevalent in MichiganInsurance fraud is prevalent in Michigan. More than 25 percent of Michigan residents recently surveyed indicated that they know one or more people who have committed insurance fraud. The survey of 400 Michigan residents was conducted by the Lansing-based EPIC·MRA and funded by the Insurance information Association of Michigan (IIAM) and the Auto Theft Prevention Authority (ATPA).

The survey found that even though one in four residents knew someone who had committed fraud, only one in eight actually reported that person to law enforcement authorities.
Having someone torch a car to collect on the insurance premiums paid in the past was listed by those surveyed as the most serious type of insurance fraud. It was followed by falsely claiming a work-related injury to collect workers' compensation.

Survey findings

Insurance fraud is prevalent
The survey also found that Michigan residents are concerned about insurance fraud. Eighty-three percent of respondents indicated that insurance fraud is a serious crime and almost 90 percent believe insurance fraud has a direct impact on them and affects their premium. Stiff penalties for those who commit insurance fraud, including fines and jail terms, were chosen as the most recommended methods of punishment.

To address this serious issue, IIAM officials recently launched a statewide program to raise awareness about this crime that picks billions of dollars from American pocketbooks each year.
"Insurance fraud is not a victimless crime," Leanne Snay, Executive Director, IIAM said. "It inflates the cost the average American household pays for insurance by $200 to $300 a year."

Vehicles Stolen

In Michigan, more than 54,000 vehicles are stolen each year. It is estimated that 25-35 percent of those are fraudulently reported stolen to collect on the insurance proceeds. Also, 13,745 vehicles were found burned in Michigan in 1998. The State Fire Marshal estimates that 20 percent of those were intentionally torched. However, that figure is likely low because many departments do not investigate vehicle fires.

Persons convicted of insurance fraud in Michigan face up to four years in prison, a maximum fine of $50,000 and mandatory restitution.

Combat crime

Insurance fraud is prevalent in Michigan
To combat this crime, insurance companies are increasing their efforts to take the profit out of insurance fraud. Insurance companies have established Special Investigative Units that train representatives to recognize potentially fraudulent claims.

The insurance group is encouraging citizens to get involved in the fight against this crime. Residents can call two insurance industry-funded organizations that have been established to deter all types of arson and auto theft, including fraudulent acts.

HEAT® (Help Eliminate Auto Thefts) rewards callers up to $1,000 if the information leads to the arrest and binding over for trial of a suspected car thief; up to $10,000 if the tip results in the arrest and binding over for trial of suspected theft ring members and/or chop shop operators. The reporting number is 1-800-242-HEAT.


Arson Control rewards up to $5,000 to persons who provide information that leads to the arrest and/or conviction of arsonists. The telephone number for reporting these crimes is 1-800-44-ARSON.
IIAM officials hope that the public awareness campaign, in addition to a new law that requires insureds whose car is found burned to file a report with the local law enforcement agency, will help deter this crime in Michigan.

The Michigan Sheriffs' Association and the Prosecuting Attorneys Association of Michigan are supporting the initiative.