Insurance fraud is a crime and includes:

• Submitting false applications for insurance
• Making false or inflated insurance claims
• Paying for referrals of insurance claimants to lawyers and health care providers
• Conviction can result in imprisonment, fines, and loss of professional licenses.

Insurance fraud occurs in virtually all types of insurance, including automobile, worker's compensation, disability, healthcare, life and homeowner's. Some people think the victims are the insurance companies. In reality, the victims are all of us who must pay higher insurance premiums and higher costs for goods and health care as a result of fraud.

Did You Know?

According to insurance statistics compiled by the National Insurance Crime Bureau:

• "Set up" insurance claims, such as arson fires and staged automobile crashes, have killed innocent bystanders
• Insurance fraud costs approximately $120 billion a year
• 25% (about $5 billion annually) of all worker's compensation losses are attributed to fraud
• About 36% of all insurance claims for bodily injury involve some element of fraud, costing an estimated $11.16 billion
• Approximately 10% of your premium pays for fraudulent claims

How To Avoid Fraudulent Auto Crashes

You can be the target of a fraudulent auto crash and can be injured or killed. In a "swoop and squat" the crook will cut in front of you and brake unexpectedly. Sometimes a confederate will box you in by driving next to you so that you can't change lanes to avoid rear ending the crook. In 1996 alone, 4,469 staged automobile crashes were reported to NICB.

• Don't tailgate. Back off when someone cuts in front of you
• Have your brakes checked regularly. Keep your car serviced. Be sure all your warning lights and signals are operating properly
• Steer clear of vehicles that are tailgating others or are moving suspiciously
• Watch out for drivers who seem to be communicating with other vehicles
• Many cars with fraud in mind contain several adults
• Many are older-model cars with multiple dents
• If you are in an auto collision, ask to see the other driver's license and proof of insurance, write down the person's name, birthdate, license number, address and insurer
• Count the number of passengers, get their names. Call the police.

If You Know of Possible Insurance Fraud, Report the Crime

Contact your insurer, local police department, the National Insurance Crime Bureau (1-800 Tel-NIBC), or the Insurance Commissioner (external link) if you are aware of someone who:

• Lied to obtain insurance coverage
• Filed an inflated or fabricated insurance claim
• Paid for or is offering to pay for referrals of automobile accident insurance claims to medical providers or lawyers

This Information Provided By:
King County Prosecutor’s Office
Complex Prosecutions and Investigation Division
500 Fourth Avenue, Room 840
Seattle, WA 98104
206-296-9010

Dated: April 12, 2001