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Could be another sign of the economy: More Americans are filing suspicious insurance claims this year, making allegedly bogus efforts to collect on everything from broken glass to car fires, according to the National Insurance Crime Bureau. In a report released Sept. 9, the NICB, a trade group for the insurance industry that monitors fraud, said that roughly 41,600 “questionable claims” were reported by insurance companies in the first half of 2009, compared with 36,700 in the first half of 2008 — a 13 percent increase. In particular, suspicious car fire claims were up 20 percent, suspicious auto glass claims shot up 76 percent and questionable product liability claims ballooned by 90 percent. The NICB, which represents 1,000 insurance companies, offers no definitive explanation for the rise in eyebrow-raising claims, just theories. “People have been committing insurance fraud as long as there’s been insurance coverage. But it’s interesting given the economic background,” spokesman Frank Scafidi said. “There are things going on in the world that cause people to do things that they might not otherwise do.” Scafidi noted that the group’s analysis is based only on reports of suspicious fraud from insurance companies. “It doesn’t mean that all of these are, in fact, fraud,” he said. Barry Chasnoff, who heads the insurance practice at Akin Gump Strauss Hauer & Feld, said he isn’t surprised at all by the report’s findings. He’s been hearing similar stories about fraudulent claims from his own insurance clients. “Their fraud investigators have become very busy in the last six months,” said the San Antonio, Texas, partner. Steven Davis, who chairs the insurance practice group at Philadelphia’s Stradley Ronon Stevens & Young, said he also has seen a rise in fraudulent claim activity, especially from individual consumers. He suspects the economy might have something to do with it. “I think this is the result of folks who might normally consider eating a claim, instead of risking surcharges or increases in premium, simply being unable to do so in this economy,” Davis said. “Of course, with more claims activity and more difficult economics generally come increased fraud.” Plaintiffs attorney Phillip Sanov, who represents policyholders, isn’t buying any of it. “I laughed — I just laughed,” Sanov said, referring to his reaction when he learned of the NICB’s report. “That is a smokescreen put out by the insurance industry in an effort to put out higher rates.” And to continue denying legitimate claims, he added. Sanov, who heads the bad-faith insurance practice group at Houston’s Lanier Law Firm, said he’s witnessing just the opposite of what the NICB report suggests. Policyholders aren’t making more false claims, he said, but insurance companies are increasingly denying legitimate ones. He said that in recent years he’s been swamped with calls from policyholders whose property damage claims involving natural disasters have been outright denied, delayed or underpaid. “It has gotten exponentially worse over the last two years,” Sanov said. He blames it in part on the economy but also on insurance carriers forgetting that “their primary reason for existence is to take care of their policyholders, not to turn a profit for their shareholders.” Tresa Baldas can be contacted at [email protected].

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