Insurance fraud costs the U.S. economy a record $308.6 billion annually, according to a new comprehensive study by the Coalition Against Insurance Fraud, the first of its kind in more than 25 years.
The study, which examined all types of insurance products, said the rising price of fraud penalizes every living American an equivalent of $932.63 a year, or $3,750.52 for the average U.S. family.
“There is a huge and monumental impact that insurance fraud causes to American citizens, American families and to our economy every single year,” said Matthew Smith, the coalition’s executive director. “We updated our study because regulators of insurance need to know this information, as do legislators in Washington, D.C., and in our state capitals all across America.”
The coalition called for carriers to commit to new and more resources to combat insurance fraud and for the formation of a new task force to focus on fraud in each specific insurance line.
The 40-plus page report compiled statistics from such sources as the FBI, the Insurance Information Institute, the Insurance Research Council, the Centers for Medicaid and Medicare Services, the American Association of Retired Persons, the National Insurance Crime Bureau, the United States Government Accountability Office and the U.S. Census, among others.
In the eight categories of insurance studied, life insurance led the pack, contributing $74.7 billion to the overall annual fraud total, followed by Medicare and Medicaid ($68.7 billion), property and casualty ($45 billion), and health care, premium and workers compensation fraud, with about $36 billion each.
“Insurance fraud is the crime we all pay for,” said Smith. “Ultimately, it’s American policyholders and consumers that pay the high cost of insurance fraud.”
The Coalition was created in 1993 and said it is the nation’s only consumer advocacy organization devoted to…