1 Year After Sandy, N.J. Urges Consumers to Stay Vigilant About Insurance Fraud

October 29, 2013

One year after Superstorm Sandy struck the state, New Jersey Department of Banking and Insurance (DOBI) Commissioner Ken Kobylowski is cautioning consumers to remain vigilant about insurance fraud.

“Each year, insurance fraud costs companies tens of billions of dollars,” said Commissioner Kobylowski. “Ultimately, this costs consumers in the form of higher premiums. Understanding, identifying and reporting insurance fraud can help reduce insurance premiums for everyone.”

Insurance fraud occurs when an insurance consumer, agent, adjuster or other business commits a deliberate deception in order to obtain an illegitimate gain. It can occur during the process of buying, using, selling or underwriting insurance.

New Jersey regulations define insurance fraud as the knowing misrepresentation of, or failure to disclose, any material fact that impacts the handling of an insurance claim or the underwriting of an insurance risk. Changing facts of a claim or risk to increase a claims payment or lower an insurance premium constitutes insurance fraud and should be reported when observed.

For example, consumers rebuilding and recovering from Superstorm Sandy should be aware that unscrupulous fraudsters continue to prey on victims.

Regulators said New Jerseyans should remain cautious of contractors or adjusters making claims that sound too good to be true. Any homeowner approached by individuals who encourage an opening or reopening of an insurance claim with promises of covering a deductible should be wary.

Consumers can also be guilty of insurance fraud. Deliberate attempts to attribute non-covered losses to those that a policy covers, staging an accident, injury, theft, arson or other type of loss that would be covered under an insurance policy; inflating a valid claim; misrepresentation to avoid paying a deductible and/or knowingly omitting or giving false information on any claim or on an application for a policy are all examples of consumer insurance fraud.

Regulators said N.J. consumers who suspect that they have been a victim of insurance fraud, or are aware of an insurance fraud occurrence, should contact the Bureau of Fraud Deterrence at 609-292-7272 x 50453, or visit www.dobi.nj.gov and complete a complaint form online at: www.state.nj.us/dobi/consumer.htm#insurance. (Under reason for complaint, write “Fraud” in “Other Description” box.)

N.J. consumers with questions or concerns about insurance fraud should contact the state’s Department of Banking and Insurance at 1-800-446-7467, or 609-292-7272 or online at www.dobi.nj.gov.

Source: New Jersey Department of Banking and Insurance

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