Fraudalent Insurance Claims

Fraud is a growing problem in insurance generally, and fraud in automobile insurance is a particularly significant problem. Suggested strategies to minimize automobile insurance fraud range from legal prosecution to education to an increased reliance by automobile insurance companies on automated data bases to a greater emphasis by automobile insurance companies on the investigation of both claims and applications for automobile insurance coverage. Additionally, a change in the structure of to a change in the structure of automobile insurance has also been suggested as a solution to the fraud problem. It is not within the scope of the authority of automobile insurance company managements, however, to implement this last suggestion. The findings of this research indicated that no single suggested action that is within the authority of automobile insurance company managements to implement would in an of itself form the basis of an effective strategy to combat fraud. The findings also indicate, however, that a combination of all of these suggestions could form the basis for such a strategy.

Fraudulent claims against automobile insurance policies have been described as an epidemic (Perry, 1992, p. 28). In Louisiana, a study estimated that up to 25 percent of all automobile insurance claims are fraudulent (National Underwriter, 1992, p. 6). Nationwide, fraudulent i

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h as those imposed by Proposition 103 in California (Kertesz, 1991, p. 38). Simultaneously, however, the insurance industry is seen by the public strongly fighting ratesetting policies that would consider insurance company investment income, particularly that income derived from the investment of policy premiums (Knowles, 1991, p. 1). To succeed in the wake of the adverse publicity buffeting the insurance industry in 1992, an insurance company must begin to play straight with the general public. Such a company must drop the Reagan/Bush attitude that it is impossible for them to be on the wrong side of an issue, and begin to develop programs and policies that demonstrate to the consuming public that the insurance company is more interested in service to policy holders than it is to investor profits. When such an attitude is genuinely adopted, investor profit will also begin to increase. With respect to insurance fraud specifically, a recent study found that an increasing acceptance of such actions is developing within the general population (National Underwriter, 1992, p. 7). The evidence, thus, is clear. The automobile insurance industry must attempt to educate the general public with respect to both the role and attit
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Approximate Word count = 2967
Approximate Pages = 12 (250 words per page)