Car Insurance Rates Analysis Reveals Policy Fraud Trends

SEATTLE, WA, April 18, 2011 (Press-News.org) CarInsuranceRates.com, one of the largest rate comparison sites for car insurance on the web, performed an analysis of auto insurance rates state by state as they relate to the rate of car insurance fraud. The study indicated that as the rate of claims fraud increases, so do car insurance rates. The correlation between the two variables suggests that carriers are passing on the cost of fraud to customers with higher rates.

"The analysis we did shows an interesting link between the rates drivers in a state pay and how rampant claims fraud is in that state. States that have serious auto insurance claims fraud problems, like Florida, also tend to have generally higher premiums. Unless lawmakers act to curb fraudulent claims, rates will most likely continue to rise sharply," said Nathan Ackerman, CIRS spokesman.

According to the analysis, car insurance fraud rates tend to be the highest in states that require personal injury protection (PIP) coverage. This coverage allows the driver to recover up to a certain amount of medical costs after an accident regardless of fault. The idea behind requiring the coverage is to minimize the number of accident-related lawsuits. While PIP coverage does help curb personal-injury litigation, it seems to have the opposite effect on fraudulent claims.

"Unscrupulous policyholders will submit fraudulent medical claims for reimbursement through their PIP coverage, and insurers are generally compliant in paying the claims because they want to avoid the expense of litigation. As a result, car insurance fraud has become rampant in certain states, and one of the consequences is artificially inflated insurance premiums," explained Ackerman.

Car Insurance Rates was established in 1997 and has grown to become a leading car insurance quote resource.

Website: http://www.carinsurancerates.com