NICB: Reports of Questionable Auto Insurance Claims Down Slightly

The number of questionable claims referred to the National Insurance Crime Bureau (NICB) for the first three quarters of 2011 represented a 7 percent increase over the same period last year and a 20 percent rise from two years ago, according to an analysis by the organization.

Nearly 75,000 questionable claims on all types of coverage were submitted to NICB from January through September of this year. That was up from about 62,300 in 2009 and 70,300 last year.

The nonprofit NICB reports as questionable those claims that are referred to it by insurers for review or investigation of possible wrongdoing. The organization works with companies and with law enforcement agencies to identify and prosecute people who are involved in unscrupulous billing and claims practices.

NICB questionable claimsClaims were referred for a variety of reasons, with many flagged for multiple concerns.

The greatest change from the first three quarters of 2010 to the same period this year was a 31 percent increase in referrals for duplicate billing, according to NICB.

Analysts found that referrals involving vehicle coverage decreased by 0.2 percent from the first three quarters of last year, with questionable reports of vehicle theft falling 8 percent from last year to 2011 and 19 percent over the past two years.

Those thefts still accounted for 32 percent of all vehicle-related reasons for referral, according to NICB.

The NICB analysis does not include information on the total number of claims filed with insurers, but industry experts say that questionable claims are a serious problem, particularly for auto insurers and their customers.

Experts say staged accidents, exaggerated injuries, inflated billing and other unscrupulous behaviors increase costs for coverage providers, who in turn raise premiums for policyholders, making it difficult for many consumers to obtain affordable coverage through even the cheapest car insurance companies.

A recent Insurance Research Council (IRC) study found that insurer losses for medical expenses, lost wages and other costs on claims filed by New York City auto accident victims have risen 70 percent over the past decade.

That increase easily outpaced the 49 percent hike in medical care costs over the same period, according to IRC. Researchers attributed the increase to questionable claims filing and rampant overbilling by medical providers.

Personal injury protection (PIP) claims filed in the Big Apple were more than four times as likely to involve apparent abuse than those filed throughout the rest of the state. Researchers say that drove the statewide average for apparent claims abuse up to 23 percent.

According to the study, 52 percent of questionable claims stemmed from accidents that occurred in Brooklyn and Queens.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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