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IRC: One in Three California Auto Claims Contain Fraud

Claims News Service, Jan. 6, 9:22 a.m. EST -- According to a recent study by the Insurance Research Council, an estimated $319 and $432 million in bodily injury liability payments in California were

By Staff Writer | Updated on January 06, 2006

Claims News Service, Jan. 6, 9:22 a.m. EST — According to a recent study by the Insurance Research Council, an estimated $319 and $432 million in bodily injury liability payments in California were attributable to claim fraud and buildup in 2002. That means almost one in three auto claims in the state contain some sort of fraud.

The study classified fraud into two categories: misrepresentation and buildup. The appearance of fraud (misrepresentation of key facts of claims) was found in almost one in ten paid California BI claims (9 percent). The appearance of buildup was more common and was found in more than one in five paid California BI claims (22 percent). Buildup refers to the exaggeration of injuries, the application of excessive medical treatment, or the intentional inflation of lost wages by an insured.

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