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Counting the cost of America’s insurance fraud epidemic

Fraud affects every aspect of insurance, costing consumers $80 billion annually.

By Christopher Tidball | Updated on April 15, 2015

For those who work in the insurance industry, there are so many tales relating to insurance fraud. From slip and falls to arson and murder for life insurance policies, there is no end to the creativity of fraudsters who cost American consumers upwards of $80 billion dollars per year. After narcotics trafficking, insurance fraud is the largest criminal enterprise in the United States. Not surprisingly, the two are often interrelated.

While insurance fraud knows no boundaries, it does appear with greater frequency in some areas more than others. Law enforcement officials say fraud factors into as many as one out of every three auto insurance claims in New York City. The problem may be even worse in Los Angeles, the city that generates the most questionable claims potentially linked to organized crime according to the National Insurance Crime Bureau.

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