Del. Cracks Down on Auto Insurance Fraud

April 1, 2005

Delaware Insurance Commissioner Matt Denn has initiated a crackdown by his department on auto insurance fraud.

Denn announced several policy changes in the way auto insurance fraud cases are handled, including makeing them public. Denn also announced his officie was taking immediate action against six alleged auto fraud perpetrators.

“We want to send a clear message to the public that people attempting to engage in auto insurance fraud will be identified, caught, and punished,” Denn said. “Delawareans already pay enough for auto insurance. They should not have to pay higher insurance rates to subsidize people who try to cheat the system.”

The insurance industry estimates that 11 to 15 percent of claims paid out by auto insurance carriers are the result of fraud.

Denn announced the following specific changes in the way that the Insurance Commissioner’s Office will handle auto insurance fraud cases:
• Insurance Department hearings for auto insurance fraud will now take place in public.

• Fines for persons found to have committed auto insurance fraud after a hearing will be increased to double the amount that the perpetrator attempted to defraud from the insurance carrier, in addition to the perpetrator being required to reimburse the insurance carrier for any money that was improperly received.

• Persons found to have committed auto insurance fraud after a hearing will be referred for criminal prosecution to the Delaware Department of Justice.

• Every three months, the insurance commissioner’s office will conduct a sweep of all outstanding auto insurance fraud cases and ensure that those cases are given priority status.

The six people against whom Denn is pursuing charges are accused of engaging in a variety of fraudulent activities, including fabrication of accidents, false claims of auto theft, exaggeration of damage to vehicles, and falsification of accident reports and employment documents.

Topics Trends Auto Fraud Delaware

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