Insurance fraud causing major problems in California

Auto Insurance

Ventura County officials begin crack down on insurance fraud

California’s Ventura County District Attorney’s Office has been awarded with a $1 million grant from the state’s Insurance Department to combat fraud. Ventura County has been battling workers’ compensation and auto insurance fraud for several years, and the funds received through the Department of Insurance are expected to help District Attorney Greg Totten make new strides in the fight against fraud and eventually drive down insurance rates for honest consumers and businesses.

Insurance fraud costAuto Insurance Frauds California $15 billion annually

According to Insurance Commissioner Dave Jones, the California Department of Insurance receives more than 28,000 referrals of fraud every years. The prevalence of fraud is costing the state more than $15 million annually, presenting a serious problem for both consumers and state officials. As fraud continues to be a serious problem, insurance companies attempt to mitigate against financial loss by raising coverage rates, thus putting more financial burden on consumers that are not tied to fraud in any way.

New funds to help improve reporting of illegal activities

Backed by a new injection of money, the Ventura County District Attorney’s Office will begin to promote better communication regarding issues concerning fraud. One of the most significant problems concerning workers’ compensation insurance fraud is that many companies that see illegal activity do not report it to the Department of Insurance. District Attorney Totten hopes to encourage these companies to report any instances of fraud they might see by providing them with incentives and the opportunity to remain anonymous so as to avoid any kind of business backlash.

Funds with help broaden the reach of auto insurance fraud investigators

Auto insurance fraud will also be a primary focus of the District Attorney next year. Totten does not have plans to launch a new investigations unit for the purpose of rooting out auto insurance fraud, but the funds provided by the Department of Insurance will expand the reach of investigative units that already exist. If the District Attorney can succeed in driving down fraud in California, he may be able to secure future funding from the Department of Insurance.

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