According to the South Carolina attorney general’s website, the average American household pays $1,030 in out-of-pocket costs as a result of insurance fraud. That’s over $85 billion a year in the USA as a result of business, home, and auto insurance fraud.
Last month, a business owner in Georgia was arrested and charged with one count of insurance fraud after presenting a fraudulent certificate of insurance (COI). He owned a garage door company. When bidding for a job, he presented a fraudulent General Liability and Workers Compensation insurance certificate.
He is now in jail. In Georgia, insurance fraud is a felony and punishable by imprisonment for 2-10 years, a fine of up to $10,000, or both.
In a market where worker’s compensation rates are high, fraudulent COI’s are more prevalent than ever. Some businesses try to skirt the system to avoid paying for insurance. Computers make it easier than ever to produce a fake certificate. Businesses who are trying to do the right thing then pay higher rates when others don’t put money into the system and operate without insurance.
Two years ago, we received a call from a business to verify a COI that listed The Turner Agency as the insurance provider for a sub-contractor the company was using. It turned out to be a copy of a COI we issued for another client that had been altered to show a false name in the Insured Section.
Immediately we contacted the office of the South Carolina Attorney General and within 24 hours, SLED was knocking on their door.
If you suspect that a COI you have received may be fraudulent, call the insurance fraud hotline at 1-888-95-FRAUD. Or you can visit the South Carolina Attorney General insurance fraud webpage for more information.