Insurance scams in LA drive premiums upwards


Insurance scams in LA drive premiums upwardsWithin the last two months, State Police Investigators in Louisiana have arrested 2 groups of fraudsters who have been suspected of staging motor vehicle accidents throughout Acadania just to receive the payments from the insurers. The premiums could now get higher even as the cases are pending in the courts and law-abiding citizens could now end up paying hefty premiums as direct fallout of these scams.

Frank Scafidi who is a spokesman for the National Insurance Crime Bureau has stated that, all those who purchase auto insurance will now be paying extra premium and this would be used to offset the money which is taken away by these fraudsters.

Although there is no way to get the actual break up, it is a known fact that it is one of the contributing factors. Companies try to make up for the losses by palming off the costs onto customers, he stated.

Louisiana was quite recently ranked as the No. 1 with regard to the auto insurance costs throughout the nation and the increase in costs are therefore quite true.

As per the reports from the state police there was a recent report by the Maryland Automobile Insurance Fund, and it was found that around 10% of all the casualty and property claims all across the nation were fraudulent. Hence, the auto fraud could lead to a further rise in premiums by another $300 each year for every household.

Louisiana Insurance Commissioner Jim Donelon made a statement saying, all of us were victims of this fraud because of the premiums we paid. These were not crimes that were perpetrated on individuals, but on those insurers with whom we all do business.

The residents of Louisiana pay around $950 more each year per household on all the insurance premiums and that includes life and health insurance as well. This is in part, due to the fraud schemes. In order to help in addressing the problem, the Louisiana Auto Theft and Insurance Fraud Prevention Authority, which is a state body, has now put up billboards all over the state in an effort to publicize the increase in costs due to such crimes and has urged people to immediately report such fraudulent activities.

Although the problem has remained for so long, Donelon stated that he has not noticed any substantial increase in auto insurance fraud. He also stated that this is a problem that occurs quite regularly. Though the upward trends cannot be documented, the tough economic conditions lead to more fraud.