California, Florida, Michigan, New York, Texas represent half of suspicious U.S. insurance claims
From 2008 to 2010, suspected insurance fraud was as frequent in the states of California, Florida, Michigan, New York and Texas as it was in all of the other states combined, according to a report from the National Insurance Crime Bureau.
Of the 251,424 questionable insurance claims reported to the bureau during that span, 124,121 (49 percent) came from those five states, with California having more than double the amount of questionable claims than any other state.
One reason these states are such breeding grounds for fraud is because they’re among the most populated in the country, bureau spokesman Frank Scafidi tells InsuranceQuotes.com.
Also, Florida, New York and Michigan are “no-fault” states – where drivers are covered for losses by their own insurance company regardless of who’s at fault in an automobile accident – making them prime targets for auto insurance fraud, Scafidi says.
“The intent of the no-fault law was decent enough, but it has since been hijacked by a lot of people intent on gaming the system to squeeze money from insurers using non-existent or minor injuries as their meal ticket,” Scafidi says.
Questionable claims are claims that insurance companies report to the nonprofit National Insurance Crime Bureau for investigation based one or more indicators of fraud.
The total number of questionable claims reported to the bureau in 2010 (91,730) was up 8 percent from 2009 (85,018). There were 74,676 questionable claims reported in 2008.
Personal auto insurance was the policy type with the most questionable claims during the three-year period, according to the bureau. Faked or exaggerated injuries and questionable vehicle thefts were cited most often.
The cities generating the most questionable claims from 2008 to 1010 were New York City; Los Angeles; Houston; Tampa, Fla.; and Detroit. In fact, Florida had three of the top 10 cities for questionable insurance claims (Tampa, Miami and Orlando).