Even with the national insurance premiums average at its lowest level in more than a year, the number of insurance frauds in the state of South Carolina continues to rise. According to officials from the state’s insurance department, there has been a steady increase in the number of suspected fraud cases reported since 1995. The news comes as insurance providers cautioned policyholders against resorting to false claims.
Insurance industry experts point out that throughout the U.S., insurance fraud is costing millions of Americans billions of dollars each year. Insurance companies are also taking it particularly hard since frauds contribute to increasing losses. To curb these losses, providers often raise premiums, making it even harder for ordinary policyholders to pay for adequate insurance.
Analysts say that if car insurance fraud cases in South Carolina continue to rise, insurers may have to resort to increasing premiums. Representatives from the insurance industry say that false claims and fraudulent incidents are costing companies millions of dollars each year. With less and less motorists taking out policies, providers are also suffering badly from decreasing revenues. Experts believe that if the trend continues, insurance rates may climb sharply.
State officials are appealing to policyholders not to commit insurance fraud. Even so, more and more South Carolinian drivers are turning to arson, theft, and even premeditated carjacking just to file for insurance money. Because of the tough economic situation, several states like California and South Carolina have reported increasing cases of insurance fraud.
According to South Carolina’s Attorney General’s office, insurance fraud has cost policyholders residing in the state some $78 million since 1995. This figure is expected to increase in light of recent revelations that the national average for unemployment may reach the 10-percent mark by the end of this year. Experts have long established a connection between the number of uninsured drivers and the unemployment rate. If the same trend holds true, then the U.S. can expect to see more uninsured drivers on the road.
Insurance officials also claim that South Carolina auto insurance fraud accounts for six out of every ten reported cases. The data suggests that motorists are finding it harder to purchase car insurance or earn enough income hence the rising numbers of insurance fraud. Analysts also add that on average, insurance fraud costs families in South Caroline $1,000 in extra premiums each year.
Sources from the insurance industry point out that the real victims are the innocent and honest policyholders who have to shoulder the added cost brought upon by the insurers’ losses.