The Slovenian car insurance industry is faced with losses in the amount of EUR 40 million to 71 million!*

Fighting fraud > Car insurance fraud



Estimations show that around 17% to 27% of all claims are exaggerated and 13% to 23% are false. Furthermore, the number of stolen cars is constantly growing; according to Eurostat 1,2 billion vehicles have been stolen in 2002 and less than a third were returned.


Notorious cases of car insurance fraud

In 2002, investigators in the American town of Lawrence observed an unusual increase in compensation claims. They started a large investigation.
They revealed a criminal organization consisting of lawyers, chiropractors, insurance agents and civil servants  
Up to 2004, 121 persons who were mostly connected to false accidents were charged.
The damage of an average compensation claim has decreased from $ 2.000 to $ 951.
The number of bodily injuries has dropped from 141 in 100 accident cases to merely 60. The expenses for compensation claims have decreased for $ 28,7 million or a stunning 60%.**



* Loss estimations are calculated between 3% and 10% of the damage expenditure. This information is based on business reports of companies for the year 2006 and the statistical report of the Slovenian Insurance Association for 2006.** .
** Derrig, Johnston and Sprinkel: Auto Insurance Fraud, 2006



Car insurance fraud comprise a broad range - from inflated compensation claims made by the insuree, who in fact was the victim of the accident, to frauds by individuals submitting false claims due to financial problems and to organized crime, where a group of people carefully plans a false accident or vehicle theft.

  

The Insurance Fraud Bureau which is a British network founded in 2006 to fight insurance fraud, made the issue of car insurance fraud its priority. The American National Insurance Crime Bureau, has saved over EUR 173 million in 2006 alone, thanks to its active theft investigations.

 

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