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Noteworthy Developments in P&C Claims

Policyholder attitudes, litigation trends and economic factors all converge in P&C claims handling. To help you stay ahead of the curve, here’s a roundup of recent developments that could impact your claim outcomes.

Younger Policyholders Are Fine with Fraud

The Coalition Against Insurance Fraud says fraud occurs in 10% of all property and casualty insurance claims and costs American consumers $308.6 billion each year.

A new report from the Coalition Against Insurance Fraud dives into who commits insurance fraud and why. Although the study found that most people consider insurance fraud a crime, it also shows a large discrepancy between age groups. Among people aged 65 or older, 96.19% say insurance fraud is a crime, but only 64.84% of people aged 18 to 24 believe the same. Many young people also seem willing to carry out fraud. In the 18 to 25 age bracket, 23.44% of respondents said they would submit a claim for vehicle damage caused by a prior accident.

Justifications for fraud include the argument that policyholders pay enough and should get some money back as well as the belief that insurance companies rip off consumers, which makes fraud fair.

Older Houses Are Driving Up Costs

Natural disasters are driving up claims costs. Older homes may be particularly vulnerable to large losses.

Although hurricanes and wildfires receive a lot of attention, other natural disasters and weather events can also cause major losses. According to Gallagher Re, convective storms caused significant losses in the first half of 2023, with an estimated $29 billion in insured losses and $35 billion in economic loss. The report declares that climate change is not a major contributor of frequency or severity, pointing instead to urban sprawl and aging houses. In 2000, 9% of homes were less than five years old, but only 4% of homes were less than five years old by 2020. Older properties are 3.5 times more likely to have new hail claims compared to older homes.

Parents Could Be Held Liable for Their Children’s Actions

On January 6, 2023, a six-year-old shot a teacher in an apparently intentional act. Although the child is too young to face prosecution, NBC News says a grand jury has indicted the child’s mother.

Although this is a criminal case, it may have implications for civil cases involving children. According to FindLaw, most states have civil and criminal parental liability laws. The criminal laws include child firearm access prevention laws and crimes against contributing to the delinquency of a minor, whereas the civil liability laws hold parents liable for monetary losses.

Property Owners and Businesses Face Liability for Crime

If a criminal injures someone in a store parking lot, who’s liable for injuries: the store or the criminal?

You might assume it’s the criminal, but, as Property Casualty 360 reports, a jury held CMS 95% liable for injuries resulting from a shooting. The victim was held 5% at fault and the criminal deemed 0% liable. The lawsuit cited negligent security. Property Casualty 360 warns this is a growing threat for property owners.

Slip and Fall Fraud Becomes Sophisticated

According to the National Safety Council, falls are the second-leading cause of unintentional-injury-related deaths. In 2020, more than 6.8 million people received emergency room treatment for fall-related injuries.

Falls are also a common cause of lawsuits, but not all claims are legitimate, such as in the case of slip-and-fall scams. According to Property Casualty 360, some of these schemes are tied to large-scale organized criminal activity. In a recent case, a personal injury attorney and an orthopedic surgeon were convicted for knowingly profiting from a $31 million trip-and-fall accident scheme that involved nearly 250 lawsuits and hundreds of unnecessary surgeries.

Catalytic Converter Theft Runs Rampant

Catalytic converter thefts have skyrocketed. According to the National Insurance Crime Bureau, insurance claims for stolen catalytic converters surged from 16,660 in 2020 to 64,701 in 2022. California is the hardest hit state (with 24,102 insurance claims) followed by Texas, Pennsylvania, Illinois, and Washington.

The California Bureau of Automotive Repairs says catalytic converters contain rare metals that thieves can sell. Experienced thieves can remove a catalytic converter in just a minute or two. When a catalytic converter is stolen, Consumer Affairs says it can cost $900 to $4,500 to acquire a replacement.

Take Control of Claims

Do you need help staying on top of claims? The right claims management software can deliver faster, more accurate processes that keep your claimants happy and your costs down. Learn more.

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