Where there is a monetary benefit to be had, individuals looking to capitalize through fraud are bound to turn up. Insurance fraud is a huge burden for many states as millions of fraudulent claims are processed throughout the country in any given year. In fact, recent stats show that Americans spend more than $85 billion a year making up for this illegal activity. South Carolina is no exception. In 2010 there was a reported $14.5 million in home, auto and other insurance fraud. This was double the amount reported in 2009.
In South Carolina, there are around $12 million worth of auto insurance fraud claims annually. That is about 80% of the total amount of all auto claims submitted to South Carolina car insurance companies. In 2010, the South Carolina Department of Insurance and the state government was able to recoup around $320,000 of that money through the court system and the agencies own insurance fraud force. However, that means there is quite a bit of money unaccounted for that thieves are getting away with each year.
What is the most common method for submitting fraud claims to insurance companies? Staged accidents tend to be the biggest moneymaker for local drivers looking to make a buck off the insurance business. This involves a group of people either working together to stage an accident or hitting an innocent victim in order to benefit from the insurance company’s pay out. This works especially well in at fault states, like South Carolina, where one driver’s insurance company can be responsible for paying out damages for every individual and vehicle involved in the crash.
Other ways that criminals benefit is by inflating the level of their injuries, submitting claims for medical expenses or property damage that are not legitimate, or misrepresenting facts. There are even companies called “medical mills” that assist insurance fraud crooks by given them medical care and documentation regardless of whether or not they are truly injured.