Three state agencies join to create insurance fraud partnership

Published: Jul. 21, 2021 at 9:34 PM EDT|Updated: Jul. 21, 2021 at 9:35 PM EDT
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COLUMBIA, S.C. (WIS) - The SC Attorney General’s Office, the Department of Insurance, and SLED have joined forces to create a partnership that aims to crack down on insurance fraud cases in South Carolina.

According to the National Insurance Crime Bureau (NICB), SC ranks 17th in the nation for complaints of insurance fraud.

“Everybody’s paying for fraud. It’s not a victimless crime,” Department of Insurance Director Ray Farmer said.

Cracking down on insurance fraud has benefits for SC residents as 10% of the cost of insurance premiums is directly related to insurance fraud. Assistant Attorney General LaRone Washington says that 10% is equal to upwards of $1000 per year.

“If insurance fraud in South Carolina did not exist, it’s the equivalent of if someone at Christmas gave you a check for $1,000, and that would be what every household saves,” Washington said.

Most claims are related to auto accidents, making up 59% of total claims in SC in 2020. SC ranks 8th in the nation for staged auto accidents, and Washington says insurance fraud is a big deal in South Carolina.

“This is a huge problem these trends are going up. Folks are finding that it’s rewarding business to do,” Washington said. “This is big business, so we need to commit real resources to combating it and the legislature really took to it.”

Greenville, Charleston, and Richland counties reported the most insurance fraud cases in 2020, with Richland leading the state. Richland county reported 289 cases, with 54% of those being automobile-related.

Washington says there are several ways criminals stage auto accidents.

“Criminals are a lot smarter than people give them credit for,” Washington said. “I think they kind of understand, ‘This is what we’re starting to get away with,’ and they kind of see the trends, just like the rest of us do, they say, ‘Okay, my cousin, my friend did it and nothing happened to them.”

Some may pack cars with people and collide purposely to collect more insurance money, while some hit rideshare vehicles to cash in on corporate insurance policies. Criminals are also known to brake check unsuspecting drivers and blame the accident on the innocent person.

“They slam on the brakes, they see you coming, and all of a sudden, everybody is in an accident and those staged accidents draw down valuable resources that should be used for other things,” Farmer said.

To avoid falling victim to insurance fraud, Farmer says to be aware of your surroundings while driving and be sure not to tailgate other cars.

The combination of the three state agencies should prove valuable in cracking down on insurance fraud across the state.

“The expertise of the Department of Insurance will be used by the SLED agents, and then SLED agents will develop the case, and they’ll give any indictments that are appropriate to be signed by the Attorney General,” Farmer said. “So, this is all coming together to combat insurance fraud.”

Washington says about 35 other states have similar partnerships. He adds that NC collects million in restitution from insurance fraud cases per year, and they have 10 times the full-time detectives SC has to investigate cases. Washington said the partnership aims to mirror the program NC has.

The partnership is funded with about $2 million from the General Assembly that will help provide more resources to investigate and prosecute cases.

Currently, the partnership is streamlining technology for intaking cases, investigating, and prosecuting them. The partnership should be fully functioning by September 1, 2021.

To report a suspicious insurance agent, agency, or claim, call the Insurance Fraud Hotline at 1-888-95-FRAUD.

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