Insurance Fraud Affects Us All

Insurance fraud seems to be a common occurrence. Have you heard someone say that they claimed more than what they lost from a fire? Or stated their items were worth more than they really were so they could - in their words - recover the deductable, too?

One person claimed all his tools were top of the line. Not one wrench or screwdriver was purchased at Wal-Mart? Hard to believe! Another person claimed he had a closet full of custom-tailored suits, rather than some being purchased off the rack. Again, a statement I question.

When people file fraudulent claims, who do you think ends up paying for it in the long run? Everyone, through higher premiums. An insurance policy is to help you get back to where you were prior to your loss, not improve your way of life!

We've had many disasters in recent years, and predictions are that we'll continue to see hurricanes and tornados affect our lives. Fires continue to burn houses and business. Flooding is happening in areas of the country where it 'never' happened before. Wild fires continue to burn.

Fortunately, something is being done about it. The Federal Bureau of Investigation has stated that the Hurricane Katrina Fraud Task Force has brought federal charges against 907 individuals across the country since Katrina affected so many lives in 2005. The Task Force's responsibility is to deter, detect and prosecute those who try to take advantage of disasters related to Hurricanes Katrina, Rita, Wilma, Gustav, and Ike, as well as other natural disasters.

The Task Force processes complaints and coordinates with law enforcement agencies to initiate investigations. Unfortunately, there are people who thrive on taking advantage of victims. The same is true in the situation of people trying to recover from disasters. It is a sad statement that such a task force is needed. However, we can be pleased that we have federal oversight on this wide-spread fraud.

More than 26,000 disaster fraud complaints have been received and over 17,000 have been or are being investigated. Just created this year, the Command Center now has a disaster fraud hotline to receive complaints related to the California wildfires, Iowa floods and Hurricanes Gustav and Ike.

These are the wide-spread disasters, and this commission is addressing the fraud committed by people taking advantage of the disaster victims. But consider your individual policy. Many insurance agents have stated that fraud - whether the type investigated by the Task Force or those committed by the policy holders themselves - will encourage the insurance companies to be more stringent when requiring proof of ownership from their customers. When filing a claim, this will impact those who do not have an inventory of their belongings because they won't be able to provide this information.