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WV Insurance Fraud Continues Amid Changing Public Perception

Beware of the sizable minority who believes that WV insurance fraud is acceptable to make up for the premiums or deductibles.

Over time, we have seen a change in the public's perception and attitude toward insurance fraud, as evidenced by the Insurance Research Council's (IRC) surveys. In 2003 and 2013, IRC released the results of their survey on people's level of acceptance of insurance claim fraud, and such results were representative of the entire adult population in the U.S., including West Virginia (WV). Overall, the IRC found a nine percent decrease in consumer acceptance of insurance fraud. However, WV insurance fraud remains to be an issue, as 10 percent of Americans continue to believe that insurance fraud doesn't hurt anyone.

A Closer Look at the Public's Perception on WV Insurance Fraud

In the past, WV insurance fraud had a high acceptance level by the public. For example, in 2003, the IRC survey result revealed that approximately 33 percent of the U.S. population accepted the practice of inflating the amount of claims to make up for the deductibles being paid. But the good news is, in the latest "Insurance Fraud: A Public View" report from the IRC, the number of people who have accepted the practice of insurance claim fraud dropped to 24 percent in 2013.

However, a sizable minority of consumers (18 percent) continue to believe that claim padding is acceptable to make up the cost of premiums. Nearly one-quarter of American males aged 18 to 34 do not object to such fraudulent activity, according to the recent IRC survey.

Although the general decline in the public's acceptance of WV insurance fraud is encouraging, it has not necessarily decreased the instances of insurance fraud. Insurance claim fraud remains to be an issue that plagues the industry. In fact, according to the State of Insurance Fraud Technology report by the Coalition Against Insurance Fraud, insurers observed a significant increase in suspected insurance fraud from 51 percent in 2014 to 61 percent in 2016.

However, measuring the exact number of fraudulent insurance claims in WV is difficult as some consumers may not feel the need to report a known fraud. One out of 10 Americans believes that insurance claim fraud doesn't hurt anyone. Moreover, according to the 2010 survey conducted by Accenture, Ltd, a management consulting company, 44 percent of consumers are not certain of their likelihood to report a known insurance fraud to insurers or state authorities.

This signifies a need to further promote public awareness of the implications of WV insurance fraud. The FBI estimates that fraud costs more than $40 billion per year, meaning the average family pays an increase of $400 to $700 per year on their premiums because of insurance fraud. Moreover, insurance fraud is a serious violation of the WV insurance law, which needs to be reported to the WV Fraud Unit.

Types of WV Insurance Fraud

Litigation arising from WV insurance fraud occurs in a variety of industries, but mostly in the lines of healthcare, auto insurance, and workers' compensation. The National Health Care Anti-Fraud Association estimates that 3 percent of the $2 trillion spent on healthcare in the U.S. is lost to fraud. The National Floor Safety Institute also estimates that 3 percent of slip-and-fall cases are fraudulent and cost approximately $2 billion per year. Residential and commercial real estate improvement contractors may chase storms and inflate or invent damage to collect on insurance. There is little national data on the amount of contractor home improvement insurance fraud in WV, but the Better Business Bureau has received more consumer inquiries regarding home improvement contractor fraud than any other type of business for the last five years.

Seek Legal Help in Insurance Claim Fraud Litigation

The nature of the insurance industry makes WV insurance fraud a problem for many businesses. Some consumers are honest, and legitimate disputes may arise regarding insurance coverage, liability for an accident, or property damage. However, a percentage of the population may inflate damage claims, exaggerate injuries or otherwise behave dishonestly to obtain a bigger payout. Businesses facing such litigation should contact an experienced attorney to ensure they can defend themselves. At Jenkins Fenstermaker, PLLC, our lawyers are committed to helping our clients against insurance claim fraud in WV. Contact us today at (304) 523-2100.

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