Insurance Consumer alert: Fighting fraud important to insurance department

TOPEKA, KS — On a national level, if insurance fraud was a business, it would be a Fortune 500 company, according to national reports. It is, by all accounts, the second largest economic crime in the United States; only tax evasion exceeds it.

“Statistics from the Coalition Against Insurance Fraud show that insurance fraud costs upwards of $80-120 billion annually across all lines of insurance,” said Ken Selzer, CPA, Kansas Commissioner of Insurance. “Most importantly, it can add hundreds of dollars to annual insurance premiums, because companies include that cost of doing business in the premiums you pay.”

This type of fraud concerns the intentional misrepresentation of facts and circumstances to an insurance company in order to obtain payment that would not otherwise be made. According to the Coalition, the illegal activity accounts for 5-10 percent of claims costs for United States and Canadian insurers. More