Allstate is fortunate to insure millions of customers, the overwhelming majority of whom are honest, hard-working individuals looking to Allstate to help rebuild their lives in the event of a loss or accident. Unfortunately, fraudulent insurance claims continue to have a negative impact on the industry.
The cost of these claims is well documented. According to the Coalition Against Insurance Fraud (CAIF), nearly $80 billion in fraudulent claims are made each year in the U.S. alone. This figure, which includes all lines of insurance, is considered to be conservative because much insurance fraud goes undetected and unreported. Since 2007, fraudulent insurance claims in America have increased year-over-year in virtually every category.
Fraud costs the average U.S. family between $400 and $700 per year in the form of increased premiums
Fraud contributes to higher insurance premiums because the illegal activity significantly adds to the cost of doing business. These additional costs contribute to a premium increase that can price essential insurance coverage, often required by state law, beyond the reach of some consumers and businesses. For example, false injury claims involving deliberately staged car accidents are a major reason auto insurance premiums in New York, Florida and New Jersey are among the nation’s highest. According to the FBI, insurance fraud is the second most costly white-collar crime in America, and accounts for more than $30 billion in losses every year. It costs the average U.S. family between $400 and $700 per year in the form of increased premiums.
At Allstate, we are fighting insurance fraud on several fronts. We employ more than 500 fraud specialists who apply a vast amount of knowledge to proactively flag suspicious activities, analyze questionable claims and prevent fraudulent payouts. Through the use of innovative technologies and network analysis tools, we can detect and help stop these crimes before they occur.
We also work with the National Insurance Crime Bureau (NICB) and local, state and federal law enforcement agencies to help identify, detect and prosecute insurance criminals. In 2012, we filed a total of 32 fraud lawsuits seeking more than $51 million in damages. In New York State alone, Allstate has filed 45 fraud lawsuits seeking more than $233 million in damages since 2003.
Common insurance scams
Insurance fraud comes in many forms, including:
- Intentionally destroying property or a vehicle, then lying to insurers about the alleged “accident”
- Faking an injury to collect disability, workers’ compensation, or a personal injury insurance claim
- Making a false theft report, when the property “stolen” has been hidden or destroyed
- Organized crime and complex fraud activity