Insurance Fraud on the Rise

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Jul 06, 2011, 08:10 ET

CHARLOTTE, N.C., July 6, 2011 /PRNewswire/ -- A recent study revealed that insurance claims submitted for damaged HVAC units were overpaid by 65% in the first half of 2011. The study went on to show that overpayment was a result of insurance carriers who paid for replacements of entire HVAC systems, when only minor, less expensive repairs were required.

"Our research found that the average claim submitted to insurance companies was the result of a homeowner being told by an HVAC company that their unit was in need of a full replacement, when in actuality, a minor repair would bring the system back to pre-loss condition," stated Damon Stafford of HVAC Investigators, the company responsible for the study. "It becomes a self-fulfilling prophecy ... homeowners experience an issue, contact a local HVAC contractor, and in turn unknowingly file a fraudulent claim. That's in essence how the game has worked for the past 30 years."

According to the Insurance Information Institute, insurance fraud is the second most costly white-collar crime (after tax evasion) in the U.S., totaling more than $29 billion each year. Moreover, the National Insurance Crime Bureau has documented that fraud raises insurance premiums by nearly $300 per year, per household. Many insurance carriers unwittingly promote fraud by paying suspicious claims rather than fighting them. Often, insurers reason that it would be more cost-effective to pay these claims than to hire an expensive mechanical or electrical engineer to seek the truth.

This challenge has given rise to niche companies like Stafford's HVAC Investigators, who utilizes local technicians across the country to assist with investigations of heating and air-conditioning claims. The firm's technicians have a deep knowledge of HVAC equipment, and charge hourly fees much lower than those of a typical engineer. They diagnose all the components within HVAC systems to determine the cause of damage, whether or not it should be repaired or replaced, and provide a recommended settlement.

"We're excited about the positive impact we're having on the insurance industry," Stafford remarked. "We realized several years ago that the HVAC property claims were on a dangerous trajectory, and fraud was taking its toll. When carriers understand that they can save, on average, somewhere between $3,000 and $4,000 per claim, they begin to grasp that this is something they should be paying attention to. It's important, and everyone we come into contact with 'gets it.' It's very rewarding work."

About:

HVAC Investigators is the nation's leading provider of HVAC assessments. The company leverages a network of more than 400 technicians around the country to provide factual, timely reports that help insurers settle fair and fast. If you'd like more information about the company's services or to submit an assignment, please visit them online at http://www.hvacinvestigators.com or contact them via phone at 888-407-5224.

Contact:

Jason Rankin
(980) 475-1618
[email protected]

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SOURCE HVAC Investigators