Insurance Fraud: Avoid Becoming a Victim | Department of Financial Services
If you suspect insurance fraud, you should report it to DFS or call the Insurance Fraud Hotline: 888 Fraudny (888-372-8369) immediately. the matter will be kept confidential.
what is insurance fraud?
Insurance fraud is a crime. And far from being a victimless crime, insurance fraud victimizes all New York State residents and costs consumers millions of dollars in higher premiums and higher prices for goods and services. the exact cost of insurance fraud is difficult to estimate because much of it goes unreported. The public can help reduce fraud and minimize its impact by learning to recognize fraud, avoiding becoming a victim of fraud, and reporting suspected fraud to DFS.
insurance fraud takes many forms
- A driver and a body shop worker agree to inflate the auto damage claim and share the “profit”.
- a homeowner falsely claims his home was burglarized and valuables stolen.
- a doctor bills an insurer for services that were not provided.
- A driver fakes a staged accident, and unscrupulous doctors and attorneys help “handle” the associated medical claims and lawsuits.
- A worker receives workers’ compensation benefits while employed.
avoid becoming a victim
As a consumer, there are several common sense steps you can take to help reduce your risk of becoming a victim of fraud and minimize its impact.
be an informed consumer
Insurance premiums are a significant expense for most of us. the premiums you pay are based on your individual claims history and the degree of risk involved. In general, the higher the risk, the higher the premium. For example, the premium for the theft of a Cadillac will be much higher than for a Toyota because more Cadillacs are stolen each year. Similarly, a stock car broker will pay more for life insurance than a librarian, all things being equal.
meet your agent or broker
Consumers can sometimes fall victim to unscrupulous agents or brokers and find they don’t have coverage until after they file a claim. If an uninsured home is damaged by fire, the owner is solely responsible for restoring it and paying mortgage holders. If a driver is involved in an accident while driving a vehicle without insurance, all personal property is subject to forfeiture if that driver is sued for damages. deal only with authorized agents and brokers. must maintain proof of license. ask to see it.
get a copy of your policy
You should receive a copy of any type of insurance policy complete with endorsements and statements specifically describing your coverage and limitations within a reasonable period of time after purchase. if you don’t, ask your insurer, agent, or broker. If there is no satisfactory explanation for the delay, please contact the Department of Financial Services at (800) 342-3736. you may not have the insurance coverage you paid for.
pay only for the services you have received
If you have received covered medical or dental treatment from a health care provider, you will receive an “explanation of benefits” statement that lists the services for which benefits have been paid. Please review it carefully to make sure you have not been billed for services that were not provided or for dates that you did not receive treatment. check carefully to confirm that you were not billed for more expensive procedures than were actually provided, a practice known as top coding. contact your insurer immediately if you think there are discrepancies.
Health care fraud translates into billions of dollars a year, resulting in higher premiums and higher costs for goods and services for all consumers. If you suspect fraud, contact the Department of Financial Services at (800) 342-3736. an investigator will contact you for details and the matter will be kept confidential.
what if you are involved in a car accident?
Report the incident to the police and get a copy of the police accident report. be suspicious if the driver of the other vehicle insists that it is not necessary to contact the police. that driver’s car may not be insured or their insurance identification card may be fraudulent. Be sure to write down the other vehicle’s license plate number and get important insurance information. if possible, take a photo of the damage.
Beware of these common insurance scams:
the faked accident
A vehicle full of people will suddenly stop in front of you, making you the cause of a rear-end collision, while the doctors and attorneys participating in the plan “handle” the medical claims and subsequent lawsuits.
These individuals will seek out injured or suspected injured parties at or shortly after the scene of the accident and direct them to the medical facilities involved in the scam. If you are involved in an accident, be aware of the “runners” and do not become a victim. Also, be suspicious if, after an emergency room visit, someone claiming to be a hospital employee contacts you and recommends a particular medical facility for follow-up treatment. Also be careful if an attorney you don’t know recommends a specific law firm to discuss a potential lawsuit.
At the scene of the accident, make sure you know the extent of the damage to your car and the other vehicle. Carefully review estimates and subsequent repair claims. body shops may improve existing damage or collude with adjusters to inflate the repair budget. Don’t let high-pressure salesmanship convince you to sign up for a type of policy or certain coverage that you’re not sure you need. take the time to decide what is best for you. Please read your policy carefully before signing it. If you have questions, ask your agent or broker, or your insurer.
fraud versus consumer complaints
Don’t confuse the crime of insurance fraud with a dispute you may have with an insurance company, for example, customer payment delays, money disputes, policy cancellations and non-renewals.
do not confuse the crime of fraud with a dispute that you may have with an institution or complaint that you want to file, for example: complaints for delays in mortgage loan modifications, delays in customer payments, disputes , policy cancellations and non-renewals. If you have a complaint or question that does not involve fraud, please file a complaint.