Questionable insurance claims spiked 19% in Colorado between 2011 and 2012, but those claims were tough to prosecute – because the state lacks an insurance fraud statute. That could be changing soon if a state representative gets her way.
Colorado State Rep. Angela Williams, who worked for 14 years in the insurance industry, wants to make all insurance fraud a felony, according to a CBS report.
Currently, Colorado can only prosecute insurance fraud under theft or forgery statutes – which means many cases never see the inside of a courtroom because of legal loopholes, according to CBS. Williams is sponsoring legislation that would make insurance fraud a felony regardless of dollar amount.
Williams said unprosecuted fraud ended up costing insurers – and those costs got passed along to customers.
“That’s just going to go back to persons like me and you and other consumers, and our rates are going to go up,” she told CBS.
The bill would also apply to fraud committed by insurance agents, CBS reported.
Nationwide, insurance fraud is an $80bn-per-year scam, according to CBS. The FBI estimates that fraud has caused rates to rise between $400 and $700 per year for the average family.
