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NICB: Questionable Insurance Claims Hit Record High

Investigators saw a record-high number of referrals for claims in 2012 that insurers found dubious, as figures increased from the previous year for nearly all vehicle-related reasons for those referrals, according to this week’s report from the National Insurance Crime Bureau (NICB).

The NICB receives insurance claims for further investigation that carriers find doubtful, called questionable claims (QCs) in the report. Those QCs are referred “based on one or more indicators of possible fraud,” according to the bureau.

From 2010-12, there was a 26.7 percent increase among all QCs, which the bureau said still make up a just fraction of total processed insurance claims. A referral does not denote fraud although an insurance company referred the QC because they found it to be suspect, according to the NICB.

Number of Shaky Car Theft Claims Still Leads By Far

There was a 15 percent overall jump from 2011-12 among the 16 vehicle-related categorizations of reasons to refer a QC.

During that time, hail damage showed the highest rate increase among reasons for referrals. In 2012, there were 1,505 of those referrals compared to 2,112 in 2011, a 35 percent increase.

Suspicious claims about cars struck while parked increased 30 percent between 2012-11, the second-largest increase among the categories.

But it is “questionable vehicle theft,” which includes boat and heavy equipment in addition to auto, which remains the leader in referral numbers by far, with 12,193 referrals in 2012, according to the report. Referrals for those claims found to be shady jumped 6 percent from 2011-12.

California Leads States in Questionable Claims

The highest number of QCs in 2012 came from California, which led by a mile. The 21,935 QCs that the Golden State generated that year was more than double the number generated from Florida, which had the next-highest number of QCs.

Here is the breakdown of the top 10 states and their number of QCs in 2012:
–California: 21,935
–Florida: 10,693
–Texas: 10,368
–New York: 9,059
–Maryland: 4,296
–Georgia: 4,126
–North Carolina: 3,855
–Illinois: 3,538
–Pennsylvania: 3,353
–Ohio: 3,289

When it comes to vehicle-related claims, California has long been a highlight in NICB reports that the bureau regularly publishes.

The Golden State is among the top states generating the most car insurance claims linked to organized crime, with Los Angeles leading the pack in terms of cities across the U.S., according to a report released last month.

In addition, California leads the nation in thefts of sports utility (SUV) and crossover utility vehicles (CUV) and has a lower-than-average recovery rate for those stolen SUVs and CUVs, the bureau reported earlier this month.

Looking at thefts of all car types, 7 of the top 10 metropolitan areas in stolen car rates were in the Golden State, with Fresno, Calif. sporting the highest rate, according to the bureau.

California residents, who already have to deal with high rates of stolen cars statewide, may have an even harder time if they want to find cheap California insurance coverage protecting them against car theft and live in one of the high-theft areas listed by the NICB.

Comprehensive coverage, the optionally purchased part of a policy securing drivers financially when their cars are stolen, can be pricier in areas with higher theft rates, according to an OnlineAutoInsurance.com analysis. According to the analysis, Fresno, which had 1 theft for every 124 residents, priced its average comprehensive policy 52 percent higher than the average in Santa Maria, which had 1 theft for every 752 residents.

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