Suffolk County Owners Saved Money on Their Car Insurance

July 25, 2013
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A recent study shows that car insurance policyholders in Suffolk County have saved more than $379 million dollars over the past 10 years, in part as a result of investigations and prosecutions targeting fraudulent claims, District Attorney Daniel F. Conley said.

“When scammers file fraudulent claims, honest policyholders are left holding the bag,” Conley said. “Hardworking men and women pay higher premiums to cover all those losses. But the work we’ve done to target insurance fraud has driven bogus claims down and saved hundreds of millions of dollars for the people of Boston and Suffolk County in the process.”

The multi-year retrospective report on the Community Insurance Fraud Initiative shows major declines in Boston, Chelsea, and Revere in:

The rate of reported injuries per car accident,

Total written insurance premiums,

Average written premiums, and

Annual billings by “high-volume” chiropractors and physical therapists

The findings come after a long-term review by the Automobile Insurers Bureau of Massachusetts and the Insurance Fraud Bureau of Massachusetts of the CIFI program, launched in the aftermath of a 2003 car crash that was staged to support subsequent fraudulent insurance claims but ended up killing a 65-year-old grandmother. The program began in Lawrence but soon expanded to include 13 CIFI regions statewide.

In Boston, the rate of injury claims per 100 accidents dropped by more than 50% from 81.5 in 2003 to 39 in 2011. Total written premiums dropped from almost $334 million to less than $309 million during the same period, average written premiums fell from a high of $1,653 to a low of $1,279, and annual billings by chiropractors and physical therapists who billed more than $100,000 per year fell from 131 to 80.

Of 1,917 defendants charged with insurance fraud statewide in connection with the CIFI program, 488 of them – better than 25% – were prosecuted in Boston. But by far, the greatest effect of the CIFI program was the cumulative savings of $346,892,292 by Boston policyholders. That number accounts for 39.6% of almost $875 million saved statewide since the CIFI program began.

“The individuals who commit insurance fraud are being prosecuted, their claims are being rejected, and the general public is reaping the benefits,” Conley said. “There’s a strong deterrent effect at work here.”

The Chelsea/Revere CIFI region was introduced in 2006, and statisticians reviewed data from before and after its implementation. The area’s injury claim rate fell from about 55% to less than 35% from 2003 to 2011; total written premiums fell from about $56 million to about $53 million; average written premiums fell from $1,545 to $1,486; and the number of high-volume chiropractors and physical therapists fell from 19 to just 8. The savings to Chelsea and Revere policyholders reached $32,427,504 after just six years.

Cases of insurance fraud in Suffolk County are reviewed for indictment by the DA’s Special Prosecutions Unit, which investigates and prosecutes fraud, corruption, white-collar crime, and associated offenses. Even when those cases are not indicted, senior SPU prosecutors lend assistance and advice to prosecutors in Suffolk County’s nine district and municipal courts as they seek the best and most appropriate result for each case.

Conley noted the tremendous contribution of the Automobile Insurers Bureau, Insurance Fraud Bureau, Attorney General Martha Coakley’s office, and State, Boston, Chelsea, and Revere police in identifying cases of insurance fraud, assisting in the prosecution of those cases, and lowering the cost of Suffolk County’s auto insurance policies.