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By Mike Causey

One of my top priorities as your Insurance Commissioner continues to be fighting insurance fraud. Since taking office in 2017, I have more than tripled the number of fraud investigators, hired a legal team to help prosecute insurance fraud offenders and formed alliances with other state and federal agencies to fight fraud.

The investment is paying off. Last year, our Criminal Investigations Division made 406 arrests, obtained 218 convictions and recovered $22.1 million in fraudulent expenditures.

We’ve made progress. But there’s much more to be done.

One alarming study by the Coalition Against Insurance Fraud (CAIF) shows a disturbing trend regarding public attitudes about insurance fraud.

The study found that 15% of Americans do not view insurance fraud as a crime. That, applied to the United States population, would amount to about 50 million people questioning the criminality of fraudulent acts.

Younger consumers are more likely to think insurance fraud is acceptable, with 37% of younger Americans between the age of 18 and 44 saying they do not believe it’s a crime. Many, the study found, do not believe that insurance fraud affects them, and they also believe there is a low risk of being caught.

Insurance fraud affects every American who pays insurance premiums. Some estimate that 20 cents on every premium dollar goes toward offsetting the cost of fraud.

A 2022 study conducted for CAIF found that insurance fraud costs consumers $308.6 billion a year. That amounts to $3,800 a year for a family of four. That’s slightly less than $1,000 per person.

If you think insurance fraud doesn’t affect you, you might want to reconsider. It affects you every time you pay an insurance premium.

Insurance fraud is defined as the intentional providing of false or misleading information, or withholding of material information, as a part of an insurance transaction.

Here are some examples of insurance fraud:

• A motorist who didn’t have collision insurance could have a crash, call their insurance company to add collision coverage and then claim the wreck occurred after the collision coverage was added.
• Someone could rent a moving truck and stage an accident with a friend. Then they’d fake an injury to collect on the trucking company’s insurance.
• A worker could fabricate an injury or exaggerate a legitimate injury to claim additional workers’ compensation money.
• A homeowner or renter could sell expensive jewelry to a pawn shop and then file a homeowners’ or renters’ insurance claim, saying the jewelry was stolen.
• A policyholder could misrepresent information on an insurance application to obtain a lower premium.
• Someone could create fraudulent healthcare provider invoices on a computer to obtain payments for care they did not receive.
• A provider could bill the insurance company for services not provided, or upcharge for services that were provided.

I need your help fighting insurance fraud. If you suspect insurance fraud, you may anonymously report it by calling the Department of Insurance’s Criminal Investigations Division at 919-807-6840 or toll free from anywhere in North Carolina at 888-680-7684.

You may also report it online at www.ncdoi.gov.

Mike Causey is the insurance commissioner for North Carolina.

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