Insurance Fraud: What Are States Doing To Fight Back?

Insurance fraud has become a hot topic for lawmakers in at least five states throughout the US. In a new press release, GEICO has lent support to a number of proposals in Colorado, Maryland, Michigan, Minnesota, New Jersey, and New York.

“GEICO puts a lot of resources into investigating and stopping staged accidents, exaggerated injuries, inflated medical bills and other acts of insurance fraud that inflate costs for consumers,” said Nancy Pierce, GEICO regional vice president and vice chair of the National Insurance Crime Bureau’s (NICB) Board of Governors. “That said, there’s a lot that must happen in the fight against fraud at the legislative level, so it’s encouraging to see positive momentum in that direction this year.”

According to the Coalition Against Insurance Fraud, here’s a rundown of the pending legislation:

  • Lawmakers in Colorado have targeted existing penalties for insurance fraud, proposing that any such activity be bumped up to a higher level felony than the current status.
  • The state insurance administration of Maryland recently backed a bill to loosen the jurisdiction requirements for where they try fraud suspects. Like the Colorado bill, this could lead to harsher punishments of fraud suspects.
  • The proposed bill in Michigan would launch a new auto-fraud agency at the state level that would help make adjustments and improvements to the state’s no-fault law, while exposing shady clinics and combating fraud more efficiently.
  • In Minnesota, a task force has been formed to examine ideas for new anti-fraud bills. Among the considerations: legislation that would improve information sharing among insurers, law enforcement and the NICB. This would enable the Justice system to levy civil fines on anyone convicted of insurance fraud in addition to criminal charges. It would also boost fraud education efforts to state residents.
  • New Jersey lawmakers are entering the evaluation stages for three bills that would restrict outsider access to crash reports in an effort to curtail fraudulent victim solicitation; expand the exchange of information among insurers and NICB; and criminalize drivers who lie about where they keep their vehicles in an effort to qualify for more affordable insurance premiums.
  • Last but not least, New York is considering several measures targeting dishonest clinics, fraudulent medical equipment providers, and “staged-crash” gangs, who actually stage accidents in an effort to collect fraudulent payouts. One such gang in England committed acts that resulted in claims of around $417,000. More on that case here.

Of the US proposals, GEICO’s vice president of the claims home office, Ryan West, admitted that nothing would eliminate insurance fraud altogether, but “they would be significant steps in the right direction.”

“We’re pleased that state bodies across the country are putting the fight against insurance fraud on the agenda and trying to implement changes that would result in lower premiums for consumers,” West added.


In Summary

Insurance fraud is anything but a victimless crime. For anyone who has ever signed up with a company and faithfully paid their premiums, it’s an act that, little-by-little, eats away at their household income. That’s why major companies like GEICO, Allstate, and State Farm, invest in special investigations divisions. The less of a threat that insurance fraud becomes, the less their customers will have to pay for security in the years ahead.

If you’re concerned that someone has committed insurance fraud — and it doesn’t matter whether it’s health, life, auto, or home — you can report it easily to the appropriate agencies. The Coalition Against Insurance Fraud has put together this tip sheet on how to report “safely, easily, and anonymously.”

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