Commissioner Donelon Addresses High Costs of Insurance Fraud Following State Police Arrests

Insurance Commissioner Jim Donelon says the recent arrests of nearly three dozen suspected insurance fraudsters in Louisiana is a reminder that fraud is a serious crime that results in added costs for all policyholders.

According to the National Insurance Crime Bureau, more than 10 percent of the insurance claims submitted each year are fraudulent, making insurance fraud the second most costly white-collar crime in America after tax evasion. The FBI estimates that fraud costs the average U.S. family between $400 and $700 a year in the form of increased premiums.

“Those who stage accidents, submit inflated invoices or forge medical records may think that they are only defrauding the insurance company, but the real result is that this behavior drives up the cost of insurance for everyone,” said Commissioner Donelon. “This is why we are always actively engaged in the prevention of insurance fraud and work diligently to reduce fraudulent claims in Louisiana.”

The recent arrests by Louisiana State Police were the result of complaints filed with the Louisiana Department of Insurance (LDI) Division of Fraud. Reports of suspected fraud are submitted in writing or through the Online Fraud Reporting System on the LDI website.

“Our fraud examiners review these reports and if we determine that they have criminal implications, we pass them along to be investigated by State Police and potentially prosecuted. We take each of these reports very seriously, and encourage those who suspect fraud is taking place to contact us immediately,” added Commissioner Donelon.

In addition, the LDI, through the efforts of the Louisiana Automobile Theft and Insurance Fraud Prevention Authority, supports the use of bait cars, license plate readers and educational outreach to combat insurance fraud. Additionally we sponsor billboards, public service announcements and public awareness campaigns to communicate this important message.

About the Louisiana Department of Insurance: The Louisiana Department of Insurance works to improve competition in the state’s insurance market while assisting individuals and businesses with the information and resources they need to be informed consumers of insurance. As a regulator, the LDI enforces the laws that provide a fair and stable marketplace and makes certain that insurers comply with the laws in place to protect policyholders. You can contact the LDI by calling 1-800-259-5300 or visiting www.ldi.la.gov.