By: NH State Rep. DJ Bettencourt – 3-24
While 2023 marked several positive insurance achievements in New Hampshire, including a record recovery for consumers of $6.1 million by the New Hampshire Insurance Department, it also represented a grim milestone for insurance fraud.
Our department’s Fraud Unit is tasked with investigating suspected insurance fraud and preparing founded cases for prosecution by county, state, and federal prosecutors. We normally receive approximately 300 fraud referrals a year on average. In 2023, our department saw a nearly 25% increase in fraud referrals, a record for this department.
It is critical for Granite Staters to appreciate that insurance fraud is not a victimless crime. It costs businesses billions of dollars each year, an expense that is passed on to consumers in the form of higher premiums.
According to the Coalition Against Insurance Fraud, more than $308 billion is stolen through insurance fraud each year. The Federal Bureau of Investigation (FBI) estimates that insurance fraud costs the average American family between $400 to $700 more in premiums every year.
Given these troubling statistics, the New Hampshire Insurance Department wants to make Granite State consumers aware of the types of insurance fraud we are encountering and what to look for to avoid it.
Insurance companies, agents/brokers, and consumers can all perpetrate insurance fraud. For example, fake or dubious insurance companies may try to entice consumers into buying fake policies by offering lower premiums than those of legitimate insurance products. Additionally, legitimate companies might try to sell non-insurance products to consumers by marketing those products as insurance.
An insurance agent or broker might perpetuate fraud on a consumer by stealing their premium payment(s) rather than passing it along to the insurance company, with the consequence that the consumer is left without coverage.
The most common forms of consumer fraud relate to auto insurance and workers’ compensation. This includes a scheme known as “past-posting,” where a person buys a policy after a loss has already occurred, and then filing a claim with a fake date or time to get coverage, staging losses, exaggerating a legitimate claim, contractors providing fake certificates of insurance, or knowingly providing false information on an insurance application. Each of these actions is a crime, and if discovered, those individuals responsible will be prosecuted.
So, what can Granite Staters do to prevent insurance fraud? Our colleagues at the National Association of Insurance Commissioners provide the following for consideration:
• Do not ignore warning signs. If you are suspicious, call the New Hampshire Insurance Department, and discuss your concerns. Warnings can include an insurance company or agent that does not have a phone number, is hard to contact, or is offering a product at a price that seems to be too good to be true. Another red flag is if you purchase a policy and do not receive a copy of your policy in a timely manner.
Never sign a blank insurance form.
• If you have doubts, stop before signing any paperwork or paying a premium. Call the New Hampshire Insurance Department to confirm the company or agent offering the product is legitimate and licensed to sell insurance in New Hampshire. Be suspicious of door-to-door or telephone marketing, or printed solicitations without any branding.
• Look out for vehicles that pull in front of you and force you to follow close: they may be intentionally trying to cause an accident. If you are in an auto accident, get detailed information on the other parties involved in an accident including injuries and how many people are present. Take plenty of pictures of the damage to all vehicles.
• Keep your insurance information in a safe place so it does not get stolen and maintain detailed records of banking and financial transactions. Consistently monitor your financial records to ensure there is no fraudulent activity.
All of us share the responsibility to prevent insurance fraud. When fraud occurs, lives, families, businesses, and careers can be destroyed. If you are a victim of insurance fraud, or you are aware of fraudulent activity, call the New Hampshire Insurance Department (1-800-852-3416) or file a complaint online at nh.gov/insurance. Our team is prepared to work with consumers, agents/brokers, and insurance companies on these issues.
Together, we can combat Insurance fraud in 2024.
D.J. Bettencourt of Salem, NH is the Commissioner of the New Hampshire Insurance Department. ◊