SOS updates uninsured motorist crack down

LANSING, Mich. (WOOD) — It’s something that can really make people mad. Most people play by the rules, including writing that check to the auto insurance company before getting behind the wheel.

But there’s a cottage industry out there, supplying bogus policies to people who think they’re buying the real thing or providing fraudulent insurance certificates to those who don’t want to pay for the real thing.

Others sign up for legitimate policies and cancel them after they get their license renewed.

Regardless of the method or reason, everybody pays.

“Just for the uninsured motorist in the catastrophic funds – the motorists who are paying for insurance are paying $220 million for those that don’t have insurance,” said Michigan Secretary of State Ruth Johnson. “Simply not fare.”

One year after forming FAIR, the Fighting Auto Insurance Rip-offs task force, Johnson went over the results of the yearlong crack down on uninsured drivers and recommendations by the task force to further defeat the problem.

A so-called snapshot of insurance certificates, taken one day in July, 2013, showed over 16 percent of insurance certificates brought to SOS offices that day were either invalid or fraudulent.

That same snapshot showed the problem is as prevalent in West Michigan as it is in others areas of the state.

Out of five counties in West Michigan – Allegan, Kalamazoo, Kent, Muskegon and Ottawa counties – more than 11 percent of the paperwork turned into local SOS branches that day were invalid.

As part of the crackdown, the state began adding more training so employees can spot bad certificates.

Legislation was enacted requiring insurance companies to update data bases twice a month so SOS employees and law enforcement can see who has canceled policies before issuing licenses.

Law enforcement also received more training so officers can spot fraudulent certificates.

SOS took another snapshot this July.

“We’ve brought it to less than half – 7.6 percent – right now either non valid or fraudulent,” Johnson said.

The FAIR task force, made up of law enforcement, prosecutors, the insurance industry and state regulators, is recommending additional data sharing, training for police and SOS staff and improved technology for tracking uninsured drivers.

The problem, the people selling the fake documents are also trying to stay one step ahead of the law.

Johnson says criminal are getting more and more sophisticated, even going as far as setting up fake help desks where agents pretend to verify policies when someone calls to check.

Johnson tells of one operation involving a woman charged with selling fake policies out of a church owned building in southeast Michigan.

The operation, which the church was not aware of, brought in at least $30,000 a month.

“Yes the criminals will change it to something else so we have to be vigilant and keep up with what they’re doing so that we can know how to stop them,” Johnson said.

The FAIR task force has tips for fighting auto insurance rip-offs.

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