Questionable Insurance Claims Spike 14%; Hail, Glass Claims Lead The Way

As insurers report increases in 2010 catastrophe losses, many times due to storms with hail, an analysis by the National Crime Insurance Bureau (NICB) reveals a 107 percent increase in questionable claims referrals for hail damage claims.

The NICB has worked with law enforcement “in pursuing suspected unscrupulous roofing companies that take advantage of storms to fake or deliberately cause damage to roofs in an effort to pay for a replacement roof that wasn’t damaged by a storm,” said Joe Wehrle, NICB president and chief executive officer, in a statement.

Overall, the NICB found a 14 percent increase in questionable claims referrals during the 2010 first half compared with the first half last year.

The report examines suspicious property, casualty, commercial, workers’ compensation, vehicle and miscellaneous claims submitted to the NICB by member companies for review and investigation. There was an increase in referrals in four of the six categories as of the end of June.

In tracking first-half referrals since 2008 there has been a steady increase in all property referral reasons except for fire/arson, which actually decreased 3 percent in 2010 from 2009.

The most common referral reason was suspicious theft or loss with 3,647, a 16 percent increase comparing the first halves of 2009 and 2010.

Among 16 vehicle referral reasons, there were more than six times more referrals for auto glass fraud during the 2010 first half than there were during the same time in 2009. Previous signals of desperation due to the economy, referrals for owner give-ups, suspicious vehicle fire and questionable theft were all down in the first half of this year.

More than 39 percent of all casualty referrals were due to allegations against a medical provider such as excessive treatment, billing for services not rendered, inflated billing and solicitation. More than 7,000 referrals were submitted for a faked or exaggerated injury, an 11 percent increase. Staged accidents continue to be a problem as there were 27 percent more referrals for this than in the first half of 2009.

Referrals for questionable commercial and workers’ compensation claims decreased 6 percent and 9 percent, respectively.

One claim can have several referral reasons, the NICB explained.

Aug. 2, 2010
National Underwriter


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