The number of car insurance fraud caused by economic difficulties and recession is starting to increase in now scary numbers.
Insurance companies report catching fake insurance claims or “Give-ups”. Increasing incidents of faking car theft or make believe fire by fraudsters in an effort to collect insurance money on any discarded vehicles have been reported. Insurance industry insiders say that the numbers have gone up since 2008, roughly by around 23%. On the other hand, the numbers of insurance claims arising from suspicious vehicle arson have gone up by 27%. Auto insurance companies are now afraid that the economy will not improve or if the government will not do something about it, the numbers may continue to go up, scarier than ever, come 2010.
Certain locations in the United States are beginning to feel the auto insurance fraud more intensely. In New York, arrests for give-ups have consistently gone up in recent years. Arrests made in New York for fraudulent auto insurance claims have gone up by 35% from 2007 to 2008, and around roughly 40% from 2008 to 2009.
Although give-ups are not yet considered as the most common and widely used gimmick in insurance fraud, agencies are still keeping a watchful eye. Car insurance companies are afraid that given time, give-ups can potentially be the modus operandi of choice by fraudsters. In addition, give-ups are very damaging to these companies. Reports show that insurance companies who have a case of suspicious car theft claims are pretty much left with a difficult choice to make. If a company doesn’t want to provide money to finance the claim, they need to prove the claim is indeed fraudulent. Some companies are not that good in detecting give-ups, and as scammers get smarter each year, it has become more difficult to prove if an incident of car theft or claimed damages due to an accident is fake.
However, based on reports, the government is quickly getting control of the situation and private insurance firms have nothing to worry about. Recent reports show that the authorities in the areas with a high insurance fraud rate are training extra harder to defeat fraud. Proper authorities are making investigations more stringent than ever, even making suggestions to insurance companies on how to effectively detect fraud.
According to industry experts, the rate of technological improvements and upgrading of insurance companies should be faster than the pace of how fraudsters think. Industry experts insist that the best way to beat those who practice insurance fraud is to outthink them and beat them at their own game.