EagleTribune.com, North Andover, MA

Merrimack Valley

April 30, 2013

Crackdown saves city drivers $68M

LAWRENCE — Drivers who purchase automobile insurance in the city have saved more than $68 million in premiums since the Sept. 4, 2003 death of a 65-year-old Lawrence woman in a staged car crash triggered a crackdown on fraudulent accident claims.

A special task force assembled by Lawrence police and the Insurance Fraud Bureau of Massachusetts shortly after that tragedy continues a decade later, leading to 488 people being charged with insurance fraud and related crimes.

The task force was so successful from the outset that it became the model for nine other task forces initiated by the fraud bureau in a dozen fraud-prone communities. Collectively, the task forces have saved drivers in those communities $875 million since they were initiated. Criminal charges have been filed against 1,917 people.

Those are the major findings of a recent report issued jointly by the fraud bureau and the Automobile Insurers Bureau of Massachusetts titled “The Community Insurance Fraud Initiative (CIFI) A Ten Year Retrospective.”

“Lawrence, while identified as the worst hotbed of fraudulent claims in the state, was not the only one,” the report noted.

“Now 13 communities and their surrounding areas have in place task forces, labeled ‘Community Insurance Fraud Initiatives,’ or CIFI’s. These task forces have been a catalyst in the steady reduction of auto insurance losses and premiums in the Commonwealth,” it continued.

“Clearly, this CIFI effort has been a major contributor to a healthy auto insurance climate in Massachusetts over the past decade,” the report said.

Much of the report is based on detailed analysis of various insurance claims data generated in each of the communities with a task force since their initiation. It measured the impact of each task force on the number of claims filed and premiums paid in fraud-prone communities.

The report determined:

■ A dramatic improvement in injury-to-accident ratios. Prior to 2003, Lawrence had an average of 141 reported injuries for every 100 accidents — considerably higher than any other community and four times the statewide average of 38 injuries per accident. This is a key statistic tool used by the insurance industry to determine “high fraud” areas. Lawrence’s ratio dropped from 134.4 to 60.2 in the first year after the crackdown and was at 49.4 for 2011.

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