The prevalence of Insurance Fraud
Insurance fraud, per the online Legal Dictionary is “The wrongful or criminal deception of an insurance company for the purpose of wrongfully receiving compensation or benefits”. Insurance fraud has become increasingly common in recent years with a significant increase of cases reported between years 2015 to 2017. Due to the rise of fraudulent cases, the state of New Jersey’s Department of Banking and Insurance created the Bureau of Fraud Deterrence to help in the fight against insurance fraud. Fraudsters, however, are getting craftier by the minute and defrauding many innocent people through dubious acts, a few of which involve staging auto accidents and forging Certificates of Insurance.
The United States alone is estimated to lose over $80 billion yearly due to insurance fraud, a cost that draws significant attention as we draw near the International Insurance Awareness Week occurring the 12th – 18th of November 2017. Due to the steadily rising numbers in insurance fraud cases, insurance companies are enforcing high premiums and rates on their customers in an effort to recoup their losses, thereby, deteriorating the insurance system.
The Importance of a COI
Have you ever thrown a catered party at an event hall and needed your vendors to provide a certificate of insurance to the property? Well, that little piece of paper is a document issued by an insurance company or broker that is used to verify the existence of insurance coverage. This certificate is necessary since business owners and contractors are required to present this document to the potential client so that they (potential client) are not held liable for any damages, injuries, or substandard work.
The article “Woodbury Contractor Charged with Insurance Fraud”, by Caitlyn Stulpin, outlines a few of the many real life insurance fraud examples that happen on a daily basis. Suffice it to say, many contractors and business owners are duping innocent people, as is with the Woodbury contractor charged with insurance fraud and forgery. The necessity of a COI becomes quite important for the verification of insurance coverage so that not only is the vendor liable, but their employees are as well.
CTrax- Certificate of Insurance Tracking Software
CTrax seeks to reduce the risk of fraud by automating the certificate of insurance tracking process. This automated system not only increases productivity and lowers overhead, but it also reduces the copious amounts of paperwork that come along with a COI. The reduction of paperwork ultimately eliminates human error while minimizing time spent on endless certificates, common for companies that work with many vendors or contractors.
CTrax allows you to conveniently view all COI critical information within one configurable and easy to use interface. Instantly import hundreds of certificates of insurance and supporting documents into the system to reduce storage space and physical copies which can be easily misplaced and read by the ‘wrong people’ and even in some cases, altered.
CTrax is equipped to keep your insurance details safe to minimize and even prevent cases of fraud. The Provider/Producer portal enables the manufacturer, supplier, and vendor to upload their certificate of insurance and check the status of their certificate on file for on-the-spot verification. CTrax makes it easy to examine the term dates of coverage making it more difficult for fraudsters to use expired COI’s or coverage dates. Take for example, the case of Lucille Meadows as outlined in an article by the Sun Herald;Tree trimming business said it had liability insurance. Grand jury says otherwise. The vendor/owner of a local tree trimming company, Scott Walker, alongside two other associates, falsified documents to claim that they had liability insurance and ultimately profited over $500 with the fraudulent COI. Had Lucille used CTrax, she would have had the chance to verify the legitimacy of the COI issued to her by the vendor- a small task that could have saved her hundreds of dollars.
Peace of Mind
Your own personal COI library is available on the CTrax system 24 hours a day, 7 days a week, 365 days a year. Because the system is cloud-based, CTrax keeps you on the move with accessibility from your desktop or mobile device. Easily track your insurance details, keep them safe with online storage, and have them with you to use whenever and wherever you may need to.
CTrax not only allows you to manage and track COI’s, but it interfaces with the insurance raters, AM Best. This seamless interface rates insurance companies from A+ to F allowing users to know exactly who their vendor is and whom they are insured with, leaving you in the safest hands possible, reducing risk and preventing fraud.
While an automated system such as CTrax, will give you peace of mind, it is advised that you should be vigilant and report any cases of fraud you may encounter.