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Consumers pay the price for insurance fraud: Downs

With personal injury claims on the rise, consumers can expect to pay even more for auto insurance, says Jim Downs, managing director of MKD International Inc.

“When it comes to automobile insurance fraud everyone pays for it,” he tells AdvocateDaily.com.

MKD works with both personal injury lawyers and insurance companies that investigate claims. Downs says there appears to be an increase in the number of personal injury claims, especially since the introduction of the contingency-fee model.

“Prior to 30 years ago, personal injury claims were far less frequent,” he says. “Now they’re commonplace. People have advocates who will take on their claim, and there’s no up-front cost for the claimant. As a result, there now seems to be more personal injury claims that are questionable.”

Downs says that like many civil litigation matters, the vast majority of personal injury cases are settled before they get to trial.

“The lawyer files a claim on behalf of the client, and in most cases, insurance companies settle because it simply costs them far more to litigate the matters,” Downs explains. 

Accident benefits are intended to provide compensation for people who suffer serious injuries through no fault of their own and there are many of those legitimate cases, Downs says.

“If you’re seriously injured and have to be on benefits for life as a result, you should be compensated, but we have provided evidence to expose some fraudulent claims,” says Downs.

In a case a few years back, MKD investigators travelled to the Caribbean to investigate a woman who was receiving disability benefits for life following an accident.

“We obtained photographic evidence that showed her sailing and operating a jet ski while claiming she was injured and unable to do many daily activities,” he says.

All those types of claims ultimately add up to higher insurance costs for consumers, explains Downs.

“At the end of the day, it's the consumers who end up paying,” he says. 

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