As you know from reading my blog, I am a big fan of the CPCU Society and the American Institute for CPCU. I am a CPCU and a member of the Society. However, as a plaintiff’s attorney, I do not always agree with them. This is one of those times.
The Insurance Research Council came out with a study claiming 11 to 15 percent of all bodily injury claims paid in California are the result of fraud or claim buildup. (Buildup refers to exaggerating a claim, an injury, or padding a bill or medical treatment.) They estimate this to be between $319 and $432 million dollars a year.
I have not seen the study, but based on their press release, BUNK. They are claiming that the appearance of fraud or the misrepresentation of a key fact occurred in 9 percent of all claims in California. I have seen more than my fair share of claims in my life. I don’t think 9 percent is even close to being accurate. I do not know who was reviewing the claims, but unless they are former adjusters, they do not know what they are looking at. Heck, a lot of current adjusters do not know what they are looking at. Why? Because most adjusters are doing the job wrong – they are looking for fraud, instead of looking to pay a legitimate claim.
Interestingly, the insurers are the ones who reported whether there was fraud. So you have the industry, who has a vested interest in pursuing its own agenda, self reporting. When the industry wants someone to take their numbers seriously, they need independent people to review their claims.
Note to the IRC and AICPCU: If you need someone to head up a study, and you want it to have credence, I will volunteer to help you get one done.