Secretary of State Johnson Announces Initiative to Fight Insurance Fraud

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Secretary of State Ruth Johnson's message to Michiganders was clear, Monday. Auto insurance fraud is not okay.

It started with a one-day snapshot on July 31st, when the Secretary of State office had its branches across the state verify insurance for every registration renewal. The results were alarming.

"Over 16 percent of the insurance certificates brought into our offices were bogus," said Johnson.

In response, Johnson has announced the Fighting Auto-Insurance Rip-offs initiative, which includes the state police, prosecutors and state and insurance leaders.

Using staff training, registration suspensions and other methods, the hope is to tackle an issue in more than half of Michigan's counties, including mid-Michigan, where 4 percent of Ingham County insurances were invalid. The number was bigger is the surrounding counties, including 12 percent in Jackson, 14 percent in Eaton and 23 percent in Clinton.

Eaton County Prosecutor Doug Lloyd says it's just the tip of the iceberg.

"This is a one-day sample," he said. "If you increase that out, obviously, that's a lot of potential cases."

Johnson agrees, adding, "Some people are buying insurance, think they're insure until they get in a car accident. Then, they find out in a very bad way they weren't insured. Also, some people are cheating on purpose."

That cost of covering those cases has fallen on those with no-fault insurance to the tune of more than $200 million. Peter Kuhnmuench, Executive Director of the Insurance Institute of Michigan says identifying the problem is just the first step.

"Now that we've got this data on an on-going basis, we're going to be able to identify that and put a bigger number on it as time goes along," he said.

More importantly, Kuhnmuench says it'll help the state to enforce the laws, ultimately saving money for everyone.

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