State insurance officials in the state of California have noticed a sharp spike in insurance fraud cases recently. According to State Insurance Commissioner Steve Poizner, there has been an increase in the number of suspected auto insurance frauds.
Poizner told reporters Tuesday in San Diego about the rise in suspected incidents. He added that the economic slump is mainly to blame for the recent events. The state official held a press conference at the San Diego Fraud Office.
The state insurance official also cautioned Californians against committing insurance fraud despite the tough economy. He pointed out that while the sluggish economy might be making things hard for car owners, insurance fraud is never the answer. Poizner explained that motorists should think twice before acting recklessly.
California’s Department of Insurance has reported an increase of 25 percent regarding insurer referrals about suspected arson fraud cases in 2008. According to the latest data, insurance providers referred more and more possible vehicle arson cases consistent with insurance fraud activities in 2008 compared to 2007.
Suspected vehicle arsons are not the only cases that have gone up substantially. The agency has also seen 200 more reports from different insurance companies about car thefts in 2008 compared to the previous year.
Insurance department officials have expressed alarm over the sudden increases, attributing most of them to the economic slowdown. They add that with the recession still underway, California can expect to see more insurance fraud cases soon.
Poizner assured insurance providers and law enforcement agencies, alike, about increased efforts to crack down on insurance frauds in the state. He points out that fraud investigators are on the verge of clamping down individuals connected to several forms of insurance fraud.
According to the Department of Insurance, five residents of San Diego, including a married couple, have been arrested on suspicion of auto insurance fraud this year. Law enforcement agencies are expecting to see similar cases and arrests as the year progresses.
Industry experts say that while insurance expenses may take up a huge chunk of Californians’ income, they can actually save money in the long run. Purchasing insurance can mean better protection for car owners involved in accidents. With the number of uninsured drivers expected to increase because of the rising unemployment rate, analysts warn that more uninsured motorists can find their ways behind the wheel of a car. In some states, it is estimated that a fifth of motorists do not have insurance.