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Questionable claims rose last year, NICB says

As Americans felt increasingly pinched by the economic downturn, incidents of attempted insurance fraud rose

In a year that saw steep economic contraction, attempted insurance fraud increased, the National Insurance Crime Bureau said this week.

The number of questionable claims reported to the NICB rose from 74,902 in 2008 to 85,209 last year, a 14 percent increase.

Questionable claims are perpetrated by criminals “who try to take advantage of the insurance company’s desire to pay claims as quickly and efficiently as possible,” NICB president and chief executive Joe Wehrle said.

Certain types of claims appeared with greater frequency last year, Wehrle added. Staged auto accidents, where people fake car accidents and make bogus injury claims in concert with unscrupulous medical facilities and attorneys, were more prevalent. New York State has a no-fault provision that allows auto insurance policyholders to make a claim on their own insurer, regardless of who was at fault in an accident, and fake injuries are a $1 billion business there.

Staged hail damage was a popular practice in 2009, too, Wehrle said.

Combating fraud saves money for all insurance customers, the NICB notes.

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Posted: February 4, 2010

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