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MI Secretary of State Looking to Crack Down on Insurance Fraud

Oct 28 | 2014  by

On behalf of Fausone Bohn, LLP on Tuesday, October 28, 2014.

Mark Mandell, Esq.

Michigan Secretary of State (SOS), Ruth Johnson, convened a 56 member task force dedicated to addressing insurance fraud in the state. The task force and the SOS recently announced their 17 recommendations.

The recommendations come amid the announcement that the SOS uncovered that a whopping 16% of the documents filed by motorists from 2013—2014 were fake. And you need proof of insurance to receive a license plate in Michigan.

With 16% of documents being fake, one has to ask how that number got so high.

Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, said he believes the high cost of insurance is driving the search for phony insurance coverage. He recommended a $3 fee to ramp up enforcement efforts against fraud. The SOS task force, however, did not address that.

Secretary of State Johnson claims the problem is costing Michigan motorists around $220 million per year – which she says is a conservative figure. That’s because if a driver with fake insurance coverage gets in an accident, the other drive must pick up the tab for those with no coverage.

Johnson said all sort of crooks are in the insurance fraud game, including a lady working out of a church netting some $30,000 a month to the sophisticated Internet fraud artists who produce documents that look real but are not.

The state police, local prosecutors and the state insurance director are all in on fighting back and the SOS has reported that some reforms have already cut the bogus percentage in half.

The task force’s recommendations also include: streamlining prosecution of offenders, assisting law enforcement in verifying insurance during traffic stops, cracking down on unlicensed insurance agents, and establishing a new “fraud commission.”

If you feel like you are a victim of insurance fraud, contact experienced Attorney Mark Mandell with Fausone Bohn, LLP, at  248-380-0000. Mark has over a decade of experience fighting for his clients’ rights.