FRAUD CRACKDOWN LOWERS CLAIMS:

March 7, 2005

Auto accident claims are down significantly in Lawrence, Mass., and several other Merrimack Valley communities after a 16-month crackdown on auto insurance fraud, according to an industry report. The Insurance Fraud Bureau of Massachusetts forecasts $25 million in savings for 2004 in Lawrence alone, based on lower claims for personal injury, property damages and other claims for the first nine months of last year, compared to the same period in 2003. Claims also were down in nearby Andover, North Andover, Methuen and Haverhill, but no savings estimate was given.

Scores of people were arrested in the crackdown on fraudulent accident reports in Lawrence after a 65-year-old woman was killed in 2003 in a staged crash that police said she helped arrange.

Accident reports filed with police have declined as much as 40 percent, and the downturn has continued for more than a year. Authorities said the latest numbers indicate a sharp decline in phony accidents because they result in more claims than real ones, typically eight injury claims for a two-car fake collision.

“This is the first set of notable insurance data we can release that can show the effect the task force has had on Lawrence,” Daniel J. Johnston, the fraud bureau’s executive director, told the Eagle-Tribune newspaper.

The fraud bureau report showed claims filed for neck, back and other so-called soft tissue injuries most often tied to fraud were dramatically down and also showed significant drops in claims for property damage and auto theft.

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Insurance Journal West March 7, 2005
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