Posted at: 02/11/2013 5:53 PM
By: Brittany Lewis

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Fraudulent Insurance Claims Leaving Consumers With The Bill

(ABC 6 NEWS) -- There have been hundreds of accidents due to the ice and snow this weekend around the state and with that comes insurance claims. But there’s a trend involving fake claims, that’s likely costing you money.

Minnesota is 10th in the nation when it comes to the fraudulent insurance claims and the increase means the consumers are stuck paying higher premiums.

Now lawmakers are working to crack down on the rising problem.

"This is a fraudulent claim,” said Song Hong, an insurance agent in Rochester.

Hong says in the last three years, he’s seen an increase in fraudulent claims.

"Because of the Minnesota no fault law, you don't have to work really hard to prove that you are hurt in an automobile accident,” said Hong.

The no-fault law provides medical and wage benefits in an accident, no matter who’s fault it is, and the coverage is mandatory.

"The perfect recipe for fraudulent activities,” said Hong.

It’s also a perfect recipe for organized crime. A National Insurance Crime Bureau Report found in the last four years, the rate of organized crime involving auto insurance fraud was up 230% in Minnesota. Primarily because of increased fraud fighting efforts in other states.

"This is a very important issue for the consumers in Minnesota and we really need to take a look at it in the commerce committee,” said Senator Vicki Jensen.

Monday, the Commerce Committee holding a hearing on the increasing fraud.

"What the outcome is, I think he said like $80 billion dollars a year an estimated cost to insurance carriers in the United States and consumers. That adds up to about $950 per family,” said Jensen.

Those numbers cause for concern for Senator Jensen.

"We want to make sure that we know as commerce committee that they have resources and right language and legislation in place so that we can protect the consumers when it comes to their insurance,” said Jensen.

To keep both the fraudulent claims and insurance premiums down.

Senator Jensen added that if they can get some sort of legislation together to deal with the fraud, they may present a bill before the end of the session.