Loudoun Insurance and South Riding Insurance, Northern Virginia Zip 201*-221*, Near 20152

The Many Colors of Insurance Fraud - And How to Prevent It

The Many Colors of Insurance Fraud - And How to Prevent It

According to the Coalition Against Insurance Fraud, a division of the Insurance Resource Council, one in five Americans or 45 million people say it is okay to defraud an insurance company in certain circumstances. Furthermore, according to a 2008 Four Faces study by the IRC, consumer tolerance of of specific insurance schemes has increased over the past ten years. To be more specific, the study says there is a decline in the number of Americans who believe it is unethical to:
- misrepresent facts on an insurance application to lower their premiums (82 percent today, down from 91 percent in 1997);
- file a claim for damage that occurred before the damage was covered (85 percent, down from 91 percent);
- inflate a claim to cover the deductible (84 percent, down from 91 percent); and
- misrepresent an incident in order to be paid for an uncovered loss (84 percent, down from 92 percent).

Insurance fraud comes in many different shapes, colors and sizes. The one common denominator is that, regardless of the form it takes, it costs insurers, and ultimately you, the consumer, billions of dollars per year. What are some of the different types of fraud that take place and what can be done to prevent it?

Insurance fraud cuts a broad swath through the insurance industry and can occur anywhere in the insurance transaction from fraudulent applications for coverage to fraudulent filing of claims. Insurance fraud is not only committed by the insurance buyer, but by attorneys, physicians, and other third parties to the insurance transaction. Even insurance company employees have been caught bilking their employers. Following are some sobering statistics:

Fraudulent and abusive auto-injury claims are a costly problem. Fraud and "buildup" added $4.8 billion to $6.8 billion in excess payments to auto injury claims in 2007. That means 13-percent to 18-percent increases in payments under private-passenger auto policies from 2002. (Insurance Research Council, Nov. 2008)

Auto insurers lost $16.1 billion due to premium rating errors in private-passenger premiums in 2007. Premium rating errors account for 10 percent of the $166 billion in personal auto premiums. Fraud accounts for a portion of these losses. Some drivers will seek to lower their premiums by schemes such as deliberately misrepresenting mileage driven, how the vehicle is used and where it's registered. (Quality Planning Corporation, 2008)

More than $2.4 billion in recoveries for fraud, waste and abuse in federal healthcare programs are expected for the first half of FY 2009 (October 2008 through March 2009). Some 1,415 individuals and organizations also were excluded from federal programs for fraud abuse; 293 criminal actions were brought, as were 243 civil actions. (Semiannual Report to Congress, Office of Inspector General, Department of Health and Human Services, Office, 2009)

Medicare and Medicaid lose an estimated $60 billion or more annually to fraud, including $2.5 billion in South Florida. (Miami Herald, August 11, 2008). Medical identity theft comprises about 3 percent (249,000) of 8.3 million overall victims of identity theft. (Federal Trade Commission, Identity Theft Survey Report, 2007)

With the advent of the Internet, an aging population, and other trends making insurance fraud a lucrative business, it will be difficult to completely eradicate the problem. Federal and state authorities, insurers, and consumer watchdog groups are all working diligently to stem the tide of insurance fraud. Here's what you can do:

First, and most obvious is to not commit fraud. The temptation to lie on an insurance application to get a better rate, an example of what is called soft fraud, should be tempered by the fact that it increases the risk of insurers canceling or even rescinding coverage upon evidence of the fraud, not to mention the legal implications.
- Ask for detailed medical and repair bills and examine closely for unusual or suspicious charges.
- If you are involved in or witness an accident that appears to be of a suspicious nature, and you feel that it may have been staged, report the incident to local law enforcement.
- Report fraud when you become aware of it. If your state does not have a hotline, your insurance company probably does. So does the National Insurance Crime Bureau. A hotline exists for Medicare and Medicaid, and you can go on the Coalition Against Insurance Fraud's website for further information on reporting fraud (www.insurancefraud.org).
- As with credit card and social security numbers, guard your insurance identification card numbers and report any theft.

Need help with your insurance policies? Please call Khalid Umerani @ NOVA Insurance Group in Chantilly / South Riding, VA at tel: 703.263.7800


www.south-riding-insurance.com
www.loudoun-insurance.com

Labels: Allstate South Riding, Insurance Fraud, South Riding Insurance

posted by Khalid Umerani @ 11:54 AM
NOVA Insurance (20152) Group - Loudoun Insurance

Personal Umbrella Policies

When It Rains, It Pours: Why You Need a Personal Umbrella Policy

In recent years, our society has become what some people call "lawsuit happy." In other words, an increasing number of people are filing lawsuits for everything from emotional injury to property damage-and they're suing for larger amounts than ever before. If someone were to file a lawsuit against you, you could end up losing hundreds of thousands of dollars or more, even if you won.

While you may have some personal liability coverage through your homeowner's or auto insurance policy, it's probably not nearly enough to cover a major lawsuit. Fortunately, you can further protect yourself with what's known as an umbrella policy. This type of policy offers a higher level of liability coverage and ensures that you and your family will be protected if someone sues you for damages.

Read on to learn more about these valuable policies:

Umbrella policies: A liability coverage "extension"

When it comes to lawsuits, the more assets you own, the more you stand to lose. A personal umbrella liability policy can protect you from these potentially devastating losses. These policies act as an extension to the current liability protection you probably have through your homeowner's or auto insurance policy.

Umbrella policies are typically sold in million dollar increments, and you can obtain a policy once your home and auto insurance policies meet a minimum "attachment point"-typically a liability limit of $250,000 or $500,000. Here in Loudoun County, Virginia, Agent Khalid Umerani often sells Umbrella policy limits of $2 million & $3 million.

What does it cover?

Most umbrella policies covers the following:

Personal injury, including false arrest, mental anguish, malicious prosecution, libel, slander, defamation of character, wrongful entry or eviction, negligent infliction of emotional distress or invasion of privacy.
Bodily injury, such as physical injury or death. In some jurisdictions, this also includes emotional injury.
Property damage, including destruction of the property of others, cost of recreation and loss of use. However, it does not cover damages done to your own property.
Defense coverage, including groundless, false and fraudulent suits, bail bond costs, loss of earning and other "reasonable" expenses.
Of course, it's probably easier to understand exactly what an umbrella policy covers by putting it into real-life terms. Here are a few examples of what this type of policy could cover:

A deliveryman is hauling your new washing machine into your home when he trips on your door mat, falls and breaks his neck. Your umbrella policy would likely cover the hundreds of thousands of dollars worth of damages.
You're driving down the road when an important corporate CEO steps into the crosswalk in front of your car. He sues you for millions of dollars in medical costs, lost earning and damages. Your umbrella policy can cover you for these damages.
Your daughter invites a friend over to play on her swing set. Her friend falls off the slide and suffers from serious injuries. When her parents sue you, your umbrella policy will cover the medical costs.
How much does is it cost?

The price of an umbrella policy depends on how much coverage you want, the number of properties you rent or own and the number of automobiles or watercraft you own. The cost associated with cars and watercraft are much higher than those associated with properties.

Let's say you are single, you own one home and one car, and you want to purchase a $5 million umbrella policy. You'll probably pay somewhere between $270 and $550 a year. On the other hand, if you are married with two children, you own two homes, a rental property and three cars, and you want a $10 million umbrella, you'll probably pay a good deal more-anywhere between $970 or $1,750 a year.

Call us here at NOVA Insurance Group, South Riding, VA (Loudoun County) to discuss whether or not an umbrella policy is right for you. In the long run, by paying a few hundred dollars per year, you could save millions. We can also be reached via our two websites:
www.south-riding-insurance.com
www.loudoun-insurance.com

Labels: Personal Liability Insurance Fairfax / Loudoun Counties, Personal Umbrella Policy in South Riding / Chantilly, South Riding Insurance

posted by Khalid Umerani @ 11:39 AM
NOVA Insurance (20152) Group - Loudoun Insurance