People Defend Lies to Insurer, Survey Finds
Nearly one of every four American adults believes it is all right to lie to an auto insurance company, committing what many would consider fraud, according to a survey released by the industry-funded Insurance Research Council.
The opinion survey, conducted by the Roper Organization with 1,987 households across the country, showed 23% of those interviewed said it is all right to pad an auto insurance claim after an accident to make up for the deductible, so the policyholder would pay nothing.
Twenty percent approved of padding claims to get back premiums they had paid and nearly one-fourth did not believe it is wrong to give a false address to receive lower premiums.
Such attitudes, resulting in larger claims and bigger payouts, are almost unquestionably driving up the cost of auto insurance for everyone, said Donald W. Segraves, the council’s executive director.
“A good many of these people probably don’t consider these things fraud,” said Segraves, who characterized them as “cheating and misrepresentation.”
“That’s part of the problem. To them, it’s like fudging a bit on the speed limits. They think it’s OK to fudge a little, and they do not regard themselves as being criminal or perpetrating a fraud.”
In other findings:
* Nearly one-third of the survey respondents, 32%, said it is “almost always” or “usually” acceptable to understate the number of miles they drive per year, thereby assuring themselves a lower premium.
* About one-seventh, 14%, said it is acceptable to withhold information about prior accidents, traffic tickets and claims when asked about them on an auto insurance application form.
* When one’s car is stolen, 14% said it was acceptable to say it had a higher value than it did, and 6% said it was all right to abandon a car and report it stolen to get an insurance settlement.
* Nine percent said it was all right to describe an accident differently from what happened to give themselves the benefit.
* Nearly one-fourth, 23%, had no problem with giving the wrong address for where a car is kept to avoid high premiums under the territorial rating system.
* After an auto accident injury, 11% said it is OK to go along with a doctor’s or lawyer’s suggestion that they stay out of work longer to receive a high insurance settlement, and 11% also agreed it is all right to incur unneeded medical treatment to build up the dollar loss and get a bigger settlement.
“I don’t think these figures are a real big surprise,” said Andrea Margolis, executive assistant at the Josephson Institute for Advancement of Ethics in Marina del Rey, which organizes workshops on ethical questions.
“These things go on all the time when it comes to people and money. . . . People tend to rationalize these issues very regularly. It’s enhanced in this case because it’s insurance. There’s an emotional reaction to the insurance industry. Many people, even my own mother, feel they’re getting ripped off.
“But the bottom line is you’re stealing,” Margolis said. “It’s awful. You’re still compromising your own integrity. If it really does drive up rates, it’s a great example of people underestimating the harm they’re doing to other people by cheating.”
Segraves said the survey results were not broken down by state or city to distinguish Los Angeles or California attitudes from those in the nation at large.
But Rowena Bishop, head of a special fraud investigation unit at the Fireman’s Fund insurance company, said: “In California, there’s no question it’s worse.”
Bishop said that apart from the claims padding and lying on forms that the survey indicates, there is a vast number of staged accidents and other outright frauds, particularly in the Los Angeles area.
