Let’s Talk About Insurance Fraud
I know, I know… it’s not something that you’d ever do, but guess what, those who don’t commit insurance fraud are the ones left paying for its impact on our state through higher rates. Insurance fraud costs the U.S. $80 billion / year or just over $950 / family. Did that get your attention?
Let’s all become more aware about what to look for, how to protect yourself, and how to report insurance fraud here in Michigan.
In Michigan, insurance fraud is a felony, punishable by up to four years in jail and up to $50,000 in fines. It is defined as when a person receives insurance money for filing a false claim, inflates a legitimate claim or bills for services that were never received.
Common Insurance Fraud Scenarios
AUTO: Kevin got into an accident but was driving without insurance. Realizing he needed the money to fix his car, he applied for insurance and omitted sharing the news about his recent accident. Weeks later he filed a claim saying that the car had been damaged in an accident, which was after his policy took effect. Without a police report on the accident, there was no way for the insurance company to prove otherwise and paid the claim.
AUTO: After Karen’s car was rear-ended, she was experiencing minimal aches and pains, but exaggerated the extent of her injuries saying her neck and back hurt so she could put in for a larger settlement due to increased medical costs.
HOME: Alison and John’s home was broken into and the burglars took a few valuables – a watch, ring, television, old laptop, etc…. However, when Alison & John reported the incident, they simply added a few items to their claim and boosted the values of others to increase the value they would be paid back.
HEALTH: Anybody who is a fan of Grey’s Anatomy will recognize this example… Grace’s best friend’s child didn’t have health care coverage and required expensive tests. Grace said the daughter was hers (used Grace’s daughter’s name) so that she could put the costs under her own coverage, saving her friend the expense.
HEALTH: Dr. Miller billed his patients’ health insurance providers for both the services he actually provided and for services that were not provided. He falsified his patients’ medical records to reflect office visits and treatments that never occurred.
Protect Yourself Against Insurance Fraudsters
Take steps to protect yourself against fraudulent activity today:
- Keep your Medicare ID number secret to avoid someone from stealing it and making false claims against your coverage.
- Take photos of the vehicles, damage and passengers immediately following an accident. You can prevent fake injury and damage claims if you have proof at the scene.
- Consider installing a dash cam to record what you see at the moment of an accident.
- Keep private information, private and question everything…especially when those looking for information get aggressive. You have the right to ask questions and verify their information.
- Ask for recommendations from your insurance company about who to use in the event of an auto accident or home repairs.
- Keep detailed records of any medical treatments received, and receipts for any work completed on your care or home and compare your records against any insurance statements you receive
Michigan Acts to Combat Insurance Fraud
Our Michigan Governor, Gretchen Whitmer, is doing her part by asking the Republican-led Legislature to fund and staff an anti-fraud investigation unit to specifically look at auto insurance fraud and help alleviate the burden of these high rates and to reform its no-fault system.
In addition, each and every one of us can make a difference. If you suspect insurance fraud, report it to the Department of Insurance and Financial Services (DIFS) by calling 877-999-6442.
For more information on insurance fraud or how you can protect yourself, talk with our experts at E&Y Insurance. With decades of experience, they’ve seen it all!
About E&Y Agency
E&Y Insurance and Tax Agents are dedicated to giving our clients the products that provide quality protection and value pricing and the peace-of-mind in times of crisis. Our goal is to establish a successful partnership with our clients, our staff members, and our partner companies. Our success is measured by our clients choosing us because they believe in our ability to meet or exceed their expectations of price, service, and expertise. Call us now to talk about your insurance or tax needs!
