The Coalition Against Insurance Fraud today released its summary of updated costs of insurance fraud. The last number of $80 billion was released in 1995 for P&C fraud only, and that number has not been updated. If adjusted for inflation, that number would be $152 billion.
The Coalition worked with a number of other organizations studying fraud to determine the overall cost of fraud. The overall cost of fraud was broken down by the following lines of business:
P&C $45 billion Workers compensation $34 billion Premium fraud $35.1 billion Healthcare $36.3 billion Medicare/Medicaid $68.7 billion Life insurance $74.7 billion Disability $7.4 billion Auto theft $7.4 billion
The total cost of fraud to the American economy is $308.6 billion per year. This amounts to $932.63 for every person, including babies, in the country per year. Annually for a family of four, the cost is $3,750.52. Over the course of an average lifetime, it amounts to $73,491.24 per person, money that most Americans could put to good use.
Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.