Joe Wehrle: For many consumers, insurance fraud flies ‘under the radar’

Joe Wehrle, president and CEO of the National Insurance Crime Bureau, is a different kind of crimefighter. His organization seeks to root out insurance fraud, which he says “is not a victimless crime.”

The victims of insurance fraud, he says, are insurance consumers. The billions of dollars lost to insurance fraud every year are recovered, in part, through higher insurance premiums. Each year, the nonprofit bureau receives more than 6,000 tips about insurance fraud, such as faked auto accidents.

Joe Wehrle has been president and CEO of the National Insurance Crime Bureau since 2008.

Wehrle has led the National Insurance Crime Bureau since 2008. He came to the bureau from the USAA Property and Casualty Insurance Group, where he had been president. Wehrle spent 33 years in the Air Force.

The bureau represents more than 1,000 insurers, self-insured organizations, rental car companies, parking services providers and transportation-related companies. Its more than 300 employees collaborate with law enforcement agencies and others to crack down on insurance fraud.

The workload at Wehrle’s organization is a hefty one. In 2008, more than 74,000 questionable claims were referred to the bureau from its members. That number climbed to nearly 92,000 in 2010.

InsuranceQuotes.com spoke with Wehrle about the fight against insurance fraud.

InsuranceQuotes.com: Why should consumers care about insurance fraud?

Joe Wehrle: Many people don’t really consider it a crime, so it flies under the radar. There’s a big impact on the consumer. The insurance companies are trying to minimize the fraud so they can keep their premiums down, and be fair and competitive in the marketplace. If they are paying fraudulent claims, they are going to charge a rate to compensate for that. Fraud costs billions per year, and some people have extrapolated that to $200 to $400 per policyholder per year. That is a lot of money.

IQ: Do you go after people with hurt necks, faking whiplash trying to defraud auto insurance companies?

Wehrle: No, we focus on bigger stuff like organized crime rings. Every once in a while, a member will ask us to do a single claim, but we generally leave that up to them. If the lady goes to the auto repair shop and they inflate the claim, we might leave that up to the individual company. What we are after is the auto repair shop. On the medical side, we’re not interested in the guy with the workers’ comp fraud; we’re interested in the doctors and lawyers who are tied into that.

IQ: What other types of insurance fraud are you seeing?

Wehrle: Cargo theft is growing. That is the entire supply chain from the manufacturer down to the consumer. Why do you want to go steal a television from Best Buy when you can steal 300 of them out of the back of a trailer? They’re targeting pharmaceuticals, too. There was one (heist) recently in New England where they stole a load of more than $70 million worth of pharmaceuticals. They go through, find the drugs they want and discard the others, or they take it all and sell it on the black market. These companies have their loads insured by many of our member companies.

–Craig Guillot