The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

I write about the Minnesota Insurance Federation from time to time. Usually after they have a press release or conference about some great harm that is "Costing Every Minnesotan!!!!". What a bunch of crap. I find it especially telling when they talk about fraud and base so much of what they are saying on very questionable "facts". I would bet if they were opposed with such sloppy information they would scream……wait for it……."Fraud!!!!"

The recent releases started showing up in Minnesota newspapers with real scary headlines:

Minnesota Leads In Auto Insurance Fraud

From the Detroit Lakes local paper.

But when you look at the story, it talks about a study that was being quoted and not released until the next day. It was announcing the score of the game the day before it is being played. It seems suspicious that they wouldn't at least release the report at the same time.

So take a look at the report that says Minnesota is so filled with fraud:

– Minnesota has increased from 16 "reports" per 100,000 claims to 53 in 2011, 24 the first half of 2012 and a "prediction" of 153 total "reports" in 2012 per every 100,000 claims filed. The report does not contain any information at all about actual fraudulent claims either made or paid. Instead, the data analyzes situations where an insurer reported a suspected fraudulent claim.

– There are two separate places in the report where the author points out that “it should be noted overall annual numbers for (year) were relatively low." and that two categories highlight areas of loss for "other personal property" and "smoke" loss. But the federation simply ignores this point despite Minnesota having "annual numbers" that are "relatively low," and have comparable percentage increases to the "other personal property" and "smoke loss" claims.

– There is no explanation for what factors are considered in filing a "report". There are several specific "categories" of "fraud" that are listed, including "medical provider/attorney relationship," "attorney activity," "medical provider," "lack of cooperation," and "faked/exaggerated injury." I wonder which category insurers use to report fraud based on "minority/ethnic sounding name"?

– There is no indication whether or not any of these "reports" resulted in any actual findings of fraud, or even if any if these "reports" were ever investigated by the insurers or by outside agencies/law enforcement.

How is any of this information worth of such a headline? What is the Insurance Federation doing other then drumming up fear at the state of the legislative session?

They still continue to use the crazy claim of:

The schemes are costing Minnesota drivers millions of dollars in wasted auto insurance costs each year.

Usually they add that this fraud costs each family 1000/ year. The numbers don't hold up.

According to the census in 2003 there were 2.0 million households in Minnesota. 66% of those are families.

So that would mean 1,320,000 families. So at $1000 a year that would mean $1,320,000,000 in fraud. It looks like the total premiums in Minnesota for 2004 Accident and Health was 99,092,981.

That would put the deficit for Insurance companies at 1,221,000,000/year. That would be a bad business to be in. It really doesn't add up.

Now fraud is bad and I would agree with anything that can be done to successfully combat it. But, I see my clients as real people that have been hurt and need help. Compared to the way plaintiffs are portrayed, we could talk about wrongful cut offs or defense doctors who will say anything for their fee.

Hopefully, these newspapers will ask to see the report first next time.

Comments are closed.

Of Interest