Maryland premiums balloon from auto insurance fraud

Maryland policy holders bear burden of auto insurance fraud

Motor & Fleet

By Allie Sanchez

With the Maryland Insurance Administration (MIA) cracking down on fraud, the government agency said that false auto insurance claims pose a real problem to insurers and brokers.

Insurers said that the common claims that are subject to fraud are cases involving a second car that already left the accident scene, and people using out of state addresses.

The second problem in turn, resulted in higher premium costs for other policy holders, auto insurance firm Geico said. False address accidents added $500,000 to the company’s premiums in Maryland. Geico insures 650,000 policy holders in the said state.

Auto insurance fraud jacks up the price of premiums because fraud cases are expensive to investigate so insurers may end up settling to expedite such cases.

Civil insurance fraud cases in Maryland increased tenfold from 2013 to 2015. Penalties and restitution increased to $143,875 last year from $18,265 in 2013.

But criminal insurance fraud dropped 45% in the same two year period. 

To address auto insurance fraud, the MIA released information on civil and criminal fraud cases in an effort to “publicly shame” offenders.
 

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