CBS' new crime drama, Numb3rs, shows a math whiz helping his detective brother fight crime. I wonder how the guy would do fighting insurance fraud?

Fraud exacts a financial toll that raises the coverage tab for all risk managers. The insurance industry estimates that insurance fraud represents 10 to 15 percent of each premium dollar. Others estimate insurance fraud's annual cost at $18 billion. When we say “industry” here, though, do not assume that it is just the insurance industry that is paying the bill. Who do you think ultimately shoulders the added insurance tab for fraud?

A recent study by the Insurance Research Council calculates that fraud and buildup added between $4.3 and $5.8 billion to auto injury settlements in 2002, representing between 11 and 15 percent of all dollars paid for private passenger auto injury insurance claims in that year. In 2002, the IRC found the appearance of fraud (misrepresenting key facts in a claim) in almost one in 10 paid bodily injury liability claims and one in 20 paid personal injury protection claims.