Most New Yorkers Will Not Inflate A Claim

The good news for insurers–nearly 80 percent of New Yorkers polled would not increase an insurance claim by even a small amount to make up for insurance premiums paid when they had no claims. The bad news–20 percent would puff up a claim.

Albany, N.Y.-based New York Alliance Against Insurance Fraud (NYAAIF) announced the survey findings today.

“Three out of four New Yorkers rightfully believe that honesty is the best policy when it comes to filing an insurance claim. But we have to convince that fourth person it is in their best interest to do so, too,” said Tom Sullivan, chairman of the NYAAIF.

“Fraudulent claims result directly in millions of dollars in wrongful payouts, which reappear in everyone's premium bills in the form of higher rates,” said Mr. Sullivan.

NYAAIF noted that committing insurance fraud can result in both fines and/or imprisonment. Sentences for fraud range from one to 25 years.

The group reported a sizable majority of those responding to its poll said that falsifying the extent of damage on an auto claim is the primary form of insurance fraud throughout New York State.

In another finding the NYAAIF called “encouraging,” the poll found 75 percent of New Yorkers disapprove of auto rate evasion, where a policyholder falsely lists the address where their car is kept or “garaged” in hopes of securing a lower auto insurance premium rate.

New York City residents looked more kindly on those who engaged in auto rate evasion, with 68 percent believing this action inappropriate.

NYAAIF mentioned that property-casualty insurers are also defrauded when a policyholder wrongfully extends a legitimate workers' compensation claim; an employer misrepresents the work hazards faced by their employees; or when someone deliberately fakes an accident, injury, theft, arson or other loss to collect insurance money illegally.

Health care insurers face comparable problems, the NYAAIF reported, as health care providers inflate the costs for services rendered or, in some instances, bill for treatments which were not. Moreover, about 85 percent of New Yorkers polled by NYAAIF said it was inappropriate to use someone else's drug prescription card.

“Insurance fraud is not limited to one region of New York State. Respondents from both upstate and downstate areas agree insurance fraud is a problem in the area in which they live. Yet, New Yorkers who are thinking about bilking their insurer should be careful because their neighbors are willing to report these crimes,” said Mr. Sullivan.

Indeed, 75 percent of New Yorkers are either likely or somewhat likely to report someone who files a false automobile damage insurance claim, and 65 percent of poll respondents said they would notify the proper authorities about an individual who gives a false address to lower their auto insurance premiums.

Seventy-five percent of those surveyed are inclined to challenge a false workers' compensation claim, and 82 percent would contact the appropriate governmental agency if they knew a health care provider had filed a false claim.

According to the organization, nearly 100 insurance companies operating in New York have joined to combat insurance fraud. Members of the NYAAIF work in cooperation with the New York State Insurance Department's Frauds Bureau, the administration of New York Gov. Eliot Spitzer and the New York State Legislature in fighting a crime “which adversely affects millions of honest New Yorkers.”

“Fighting fraud effectively requires a collective effort by insurers, law enforcement and the public. Our poll found the typical New Yorker is well aware of the issue and willing to fight back,” said Mr. Sullivan.

More information about the Alliance is online at www.fraudny.com.