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Construction Insurance Bulletin


By December 1, 2012No Comments

The Coalition Against Insurance Fraud did an extensive study to learn why public tolerance of insurance fraud seems to be increasing. The coalition commissioned a national research firm to conduct a series of consumer focus groups, as well as a telephone survey of 602 households.

Respondents offered three main reasons for committing insurance fraud: 1) To save money or reduce costs; 2) to complete work that they couldn’t otherwise afford; and 3) to “get back” at insurance companies.

Although respondents acknowledged that fraud leads to higher premiums, they believed that premiums would keep rising even if fraud were eliminated. They also said that even though the public has a moral obligation to report fraud, most wouldn’t report a fraudulent act themselves. When asked why some people resist committing fraud, the most common reasons were a strong sense of right and wrong or a fear of being caught and punished. Respondents said insurers could discourage fraud by rewarding customers for good behavior, such as providing rebates or credits for not filing claims for a period of time and aggressively pursuing customers who do commit fraud.

Fraud costs U.S. businesses billions a year. Do your customers and employees recognize that fraud is increasing your costs of doing business – and thus your prices? Have you implemented polices that let your employees and subcontractors know that you won’t tolerate fraud and will prosecute it actively when discovered?

For resources and materials to help you combat fraud and curb the costs of fraudulent acts on your business and insurance program, give us a call. We’re here to help!