Insurers Reported Record Number of Questionable Claims in 2011

Insurance companies reported a record number of questionable claims to the National Insurance Crime Bureau (NICB) last year, with the annual volume of referrals surpassing the 100,000 mark for the first time in the NICB’s history, according to a report released Tuesday.

NICB annual referrals, 2011The NICB regularly works with insurers and police to investigate claims referred to it by the 1,000 property/casualty insurers that fund the not-for-profit organization.

Last year, that meant taking a look at 100,450 claims, which represents a 9.4 increase in referral volumes from the year before and a 19 percent increase since 2009, when just over 84,400 claims were reported as questionable.

Most of the referrals–about 78,000–fell under the “miscellaneous” category in 2011.

Vehicle claims was the third-largest category, accounting for over 35 percent of the more than 100,400 referrals lodged.

Referrals for vehicle claims increased 7.5 percent between 2009 and 2011, with there being a total of about 35,650 last year.

The most common referral related to vehicles was questionable theft, with 11,451. That accounted for nearly a third of all vehicle referrals.

The next largest referral reason was faked damage, which was less than half the volume of theft referrals but was still substantial, coming in at 4,998 last year. That’s a 23 percent increase from the year before.

Another category that has seen increases in virtually every subcategory is casualty referrals, which has seen a 2009-2011 surge of 37 percent.

Among the subcategories that have seen the biggest spikes in claims referrals are excessive treatment, faked or exaggerated injuries and billing for services that were never provided.

All of those problems have been major targets of recent Florida and New York auto insurance reform efforts.

One major improvement reflected in the new NICB data was a 63 percent decline in the number of auto glass insurance fraud referrals over the last two years. The annual volume dropped from 2,182 down to 817 during that period, although the numbers still aren’t back down to 2009 levels. That year, there were only 397 auto glass referrals.

“We are encouraged by the trend in auto glass questionable claims,” said Joe Wehrle, president and chief executive officer of the NICB, in a statement. “Our efforts to publicize this problem and to make insurers, law enforcement and the American public more aware of the potential fraud in the auto glass repair arena is hopefully having an impact.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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