Double-edged Sword

This summer’s movie blockbuster Terminator 3 features an apocalyptic battle between man and machine. In the war on insurance fraud, though, man and technology can and should work together for ultimate success. Insurance fraud exacts a huge financial toll that raises the tab for all buyers. The insurance industry estimates the cost of fraud represents 10 percent to 15 percent of each premium dollar. Some observers estimate its annual cost to the industry at $18 billion. Insurance fraud can be broadly categorized into three areas: false claims for bodily injury; arson for profit; and false or intentional auto theft and physical damage. It assumes many forms, including staged accidents and faked injuries. It also can surface as more subtle variants, such as exaggerating minor injuries to maximize compensation.