We have met the enemy,
and he is us. . .
Pogo

    Almost everyone agrees that insurance fraud is a major problem in South Carolina and throughout the nation.  Who do you think of when you hear about insurance fraud?  Career criminals staging accidents?  Lawyers filing lawsuits for uninjured accident victims?  Medical providers claiming payment for procedures on non-existent patients?  Agents who put their insured in coverages they do not really qualify for in order to save premiums? Insurance companies that fraudulently deny coverage as in the movie The Rainmaker?

    All these professions and institutions are made of flawed human beings, and some have been known to commit fraud. But most of us do not think about the guy next door, or even our own kinfolks.  Those people are not criminals, are they?

    I serve on the national Coalition Against Insurance Fraud, which fights insurance fraud by promoting anti-fraud legislation and fraud awareness throughout the country.  It has commissioned studies concerning public attitudes about insurance fraud, which have led to disturbing findings.  Studies of the Coalition and other organizations have indicated a fairly large portion of the population (between 30 and 40%) believe it is okay to falsify claims in at least some circumstances.  The studies also show a good portion of insurance fraud stems not from sophisticated criminal conspiracies but from ordinary folks.  This stems from a number of factors, including peoples' attitudes toward insurance.  Some think they are getting back at insurance companies who are huge conglomerates making too much money.   Some believe everybody pads claims, so why not them. Some view insurance as an investment.  When they finally have an accident, if they do not convince the body shop to exaggerate the costs of repairs so they can cover a deductible, how will they ever get back their investment?

    Clearly, these views are flawed. Insurance is a business of big numbers.  Whatever folks think about insurance companies, like any other businesses they must earn reasonable profit or go bankrupt.  If their losses are inflated by fraudulent claims, it is predictable that they will file for rate increases.  Insurance is not an investment.  With insurance, insureds pool all the risks together so that no person must bear the full financial burden of a catastrophic event.  The idea is not to make money but to avoid loss.

    So if you hear of someone who has a minor accident who tells you he can go to a certain chiropractor, doctor or lawyer who will help get money even though he is not hurt, or if you hear someone say they put one over on the insurance company by agreeing with the body shop to claim twenty percent more than the actual repairs, tell them: "Thanks a lot for raising premiums for all of us."   Yes, even the frauds will pay higher premiums in the future because of the fraud.

    Incidentally, such frauds may be more difficult to get away with in the future.  Many insurance companies have set up special investigation units that use sophisticated methods to detect fraud.  Also, recently a the General Assembly created a special Insurance Fraud Division in the Attorney General's office that is dedicated to prosecuting insurance fraud cases.

    Insurance fraud hurts us all. Don't tolerate it.