Local case highlights damage done by insurance fraud

Sunday, May 22, 2016

A recent local case involving alleged insurance fraud brings into focus the damage that such claims can cause for all insurance customers.

Over the past two months, Det. Sgt. Pat McFadden of the Putnam County Sheriff's Office investigated the suspicious nature of a report in which Jeremiah Hubbell, 38, Greencastle, had reported the theft of a Dixie Chopper mower along with other items from his residence.

McFadden, along with Det. Doug Nally and insurance investigators, began to work in concert when their suspicions of an attempt to commit insurance fraud developed.

In a probable cause affidavit presented to the Putnam County Prosecutor's Office, McFadden described events of occurrence related to him and other investigators were not true.

Investigators allege that Hubbell manufactured false evidence of a crime and was disingenuous in his initial statement to investigators.

Upon further investigation and interviews, Hubbell made admissions to investigators that he had in fact produced photographs from the internet of items initially reported stolen.

Upon review of the investigation the Putnam County Prosecutor Tim Bookwalter criminally charged Hubbell with false informing and insurance fraud, a Level 5 felony.

A warrant was issued for Hubbell's arrest and he was booked in the Putnam County Jail on Monday, May 16. He posted bonded following an initial hearing in Putnam Superior Court.

Putnam County Sheriff Scott Stockton has investigated these, and other financial crimes for monetary gain previously when employed with the Indiana State Police and would like to remind the public that insurance fraud affects everyone.

"Some may think these types of crimes are victimless, as no one is hurt except insurance companies," Stockton said, "when in fact it's actually the contrary. We are all victims because fraud affects how much we pay for insurance in all categories of coverage."

According to the Coalition Against Insurance Fraud, nearly $80 billion in fraudulent claims are made annually in the U.S. This figure encompasses all lines of insurance. The FBI estimates fraud costs each insurance consumer in the U.S. between $400.00 and $700.00 annually in increased premiums.

* Fraud accounts for 5-10 percent of claims costs for U.S. and Canadian insurers. Nearly one-third of insurers say fraud was as high as 20 percent of claims costs.

* 57 percent of insurers predict an increase in personal-property fraud by policyholders. Around 58 percent say the same for personal auto insurance, and 69 percent expect a rise in workers-compensation scams.

* 61 percent predict an increase in auto-insurance fraud by organized rings, and 55 percent predict an increase in workers-compensation scamming.

* About 35 percent say fraud costs their companies 5-10 percent of claim volume. More than 30 percent say fraud losses cost 10-20 percent of claim volume.

Insurance fraud can be:

Opportunistic -- the padding and exaggeration of otherwise legitimate claims.

Premeditated -- Arson, theft, staged incidents involving the deliberate fabrication of a claim.

Fraudulent non-disclosure -- misrepresentation of facts material to the insurance policy, such as failure to disclose a criminal conviction or giving deliberately misleading information in support of a claim.

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