Insurance fraud on rise in Nevada

The National Insurance Crime Bureau expects to investigate about 600 complaints of insurance fraud in Nevada in 1998.

Padding insurance claims and other forms of fraud cost the average Nevada family more than $1,640 a year in higher insurance premiums and costs for goods and services.

"Nevada is a hot target," said Michael Powell, the NICB's western division vice president.

"Arizona and California have strong (law enforcement) fraud units which is leading to the exporting of insurance fraud into your state, coupled with the massive population increases," he said.

Nevada Attorney General Frankie Sue Del Papa and others expressed concern that the court system hasn't been more aggressive in punishing insurance-fraud perpetrators.

"Some defendants are going to jail longer for stealing a loaf of bread at a 7-Eleven store than for being involved in a $100,000 insurance fraud," said Jerry Carnahan, president of the Nevada Insurance Council.

Insurance fraud costs Nevada citizens nearly $800 million annually, with the average policyholder paying an extra $200 to $300 a year in higher premiums, Del Papa said.

The industry needs to do a better job of educating the public that everyone pays for insurance fraud, she said.

A 1997 study by the Insurance Research Council indicated that 40 percent of respondents said padding claims was acceptable, up from 22 percent in 1993.

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