Insurance fraud occurs every day, and in every state. Insurance schemes steal at least $80 billion a year, the Coalition Against Insurance Fraud estimates.
But insurers and states respond to fight insurance fraud.
Anti-fraud units. Most insurers actively fight fraud with Special Investigation Units — or SIUs. The investigators typically have strong law enforcement backgrounds, or come from elsewhere in an insurer such as the claims department.
Anti-fraud software. Many SIUs use sophisticated software to identify schemes, especially large and complex fraud rings. One of the most powerful programs, predictive analytics, even can forecast the likelihood of certain schemes happening in the future.
Educate consumers. Insurers educate consumers how to protect against being scammed. Insurers also often sponsor toll-free fraud hotlines accept tips through their websites.
Train employees. Most insurers train employees such as adjusters and claims staff how to spot fraud.
More fraud bureaus. State insurance regulators have created fraud bureaus in over 40 states and the District of Columbia. These agencies investigate suspected schemes.
Prosecutions growing. State fraud prosecutions have tripled over the last three years, according to a new study of state fraud bureaus by the Coalition.
Tougher fraud laws. To give prosecutors better legal tools to convict crooks, the Coalition Against Insurance Fraud developed a tough model state fraud law. Nearly 20 states have adopted or strengthened their insurance fraud laws using the Coalition's model.
States in general have passed dozens of fraud laws in recent years, but large gaps still remain.
Fraud fighters must better educate state lawmakers about this crime, and better organize lobbying efforts.