Insurance fraud costly for industry, consumers

Watch your back, because this week is Insurance Fraud Awareness Week.

Insurance fraud, a felony in South Carolina, costs the industry nearly $120 billion a year. Consumers spend about $300 annually per household on average in additional insurance premiums to cover the costs, according to the National Insurance Crime Bureau, a nonprofit sponsored by the property/casualty insurance industry.

Fraudsters aren't limited to organized gangs, officials say. Often, people involved in minor fender-benders try to pull one over on insurance companies. Claims of back and shoulder pain or headaches often arise from a mere bumper scrape.

Investigators take all cases seriously, said Allison Love, executive director of the S.C. Insurance News Service. If insurance fraud were a business, it would be a Fortune 500 company, she said.

Officials encourage consumers to use the S.C. Insurance Fraud Hotline to report cases to the Attorney General's Insurance Fraud Division. The hot line — 1-888-95-FRAUD — is available toll-free, 24 hours a day.

There were 722 complaints of insurance fraud reported in South Carolina in 2006, a 27 percent increase over 2005, according to the Fraud Division. Twenty-three percent of the cases were in the Lowcountry, with the greatest number of complaints, 45 percent, involving automobile insurance fraud. Keep checking that mirror.

Forestalling foreclosure

With mortgage defaults rising as increasing numbers of adjustable-rate mortgages reset to higher interest rates, the U.S. Department of Housing and Urban Development has released its top 10 tips for homeowners who face foreclosure:

1. Don't ignore the problem: The further behind you get, the harder it is to recover.

2. Contact your lender as soon as you realize you have a problem: You may keep your home.

3. Open and respond to all mail from your lender: See No. 1.

4. Know your mortgage rights: Find your loan documents and read them.

5. Understand foreclosure prevention options: Start at www.fha.gov.

6. Contact a nonprofit housing counselor who can help you understand the law and your options, organize your finances and represent you in negotiations with your lender.

7. Prioritize your spending. After health care, keeping your house should be your first priority.

8. Use your assets. Do you have a second car, jewelry or other assets you can sell for cash to help reinstate your loan? Such efforts demonstrate to your lender that you're willing to make sacrifices to keep your home.

9. Avoid foreclosure-prevention companies. You don't need to pay fees for foreclosure-prevention help; use the money to pay the mortgage instead.

10. Don't lose your house to foreclosure recovery scams. If a firm claims it can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may be signing over the title to your property and becoming a renter in your own home.

Diversity awards

Internet-based DiversityBusiness will conduct its eighth annual "Top Small Businesses in America" survey to determine the Top 500 Small Businesses, Women-Owned Businesses and Diversity-Owned Businesses in the U.S., plus other state awards.

To participate, register at DiversityBusiness.com. All small businesses and those that are owned by women, disabled people and minorities are encouraged to register. Winners will be honored at the Multicultural Business Conference next April in Orlando, Fla.

Reach Peter Hull at 937-5594 or phull@postandcourier.com.