Michigan insurance fraudWhy Michigan Insurance Fraud Protection is needed

According to the NICB reports Michigan has more fraud claims than all but two states, California and Texas. Michigan is the only no-fault state that does not have a fraud authority. Michigan has fraud laws but currently operates without the ability to pursue people who commit fraud.

A statewide anti-fraud authority paid for by the insurance industry could help reduce the amount of insurance fraud claims. Michigan already has an insurer-funded Auto Theft Prevention Authority.  This organization helped to reduce the number of fraudulent theft claims since it was established in 1996. 

What is Michigan Insurance fraud?

Insurance fraud is a crime where a person receives insurance money for filing a false claim, inflating a legitimate claim or billing for services that did not occur.

There are many ways to commit Insurance fraud. It ranges from people who “pad” their claims to elaborate schemes perpetrated by members of an organized ring.

Types of Michigan insurance fraud include:

  • Inflating a claim to get out of paying a deductible or to cover past insurance premiums.
  • The destruction of an owned automobile, home or business to collect insurance.
  • Exaggerating the extent of an injury to collect workers’ compensation benefits or automobile medical benefits.
  • Billing insurance companies for medical services that were not provided.

Governor Snyder authorizes fraud authority

Sept. 2018 Governor Snyder signed an executive order establishing the anti-fraud unit within the state Department of Insurance and Financial Services. The authority will function as a criminal justice agency and will investigate “criminal and fraudulent activity” and will oversee the auto no-fault insurance law, the state consumer protection act, and health care statutes, according to the order. The executive order gives the authority permission to collect and maintain claims of fraudulent activity and criminal investigations,  conduct background checks on licensees.  The fraud department will work with law enforcement agencies and coordinate prosecution.

Michigan organizations to help stop Michigan insurance fraud:

The Help Eliminate Auto Theft (HEAT) program rewards callers up to $1,000 for tips that lead to the arrest and binding over for trial of a suspected car thief. $10,000 will be awarded if the tip results in the arrest and binding over for trial of suspected theft ring members and chop shop operators.  The reporting number is 1-800-242-HEAT.

Through ARSON CONTROL, rewards of up to $5,000 and will pay people who provide information that leads to the arrest and conviction of arsons.  The telephone number for reporting these crimes is 1-800-44-ARSON.

Contact NICB If you suspect someone is committing insurance fraud visit site or call the National Insurance Crime Bureau at 1-800-TEL-NICB.

Finally, for more information on how fraud and the Michigan Catastrophic Claims Association affects your insurance premiums click on the highlighted link.