(BPT) - The last thing anyone wants is for his or her insurance rates to increase. Most policyholders would be surprised to know it’s the last thing their insurance company wants to happen, too. That's why most major carriers have a department of investigators dedicated to stopping one of the primary causes of rate hikes: insurance fraud. In fact, fraudulent insurance claims are the second most costly white-collar crime in America – to the tune of $40 billion annually.

“Each year the average U.S. family is hit with $400 to $700 in increased premiums due to phony insurance payouts,” says Dan Bales, national director of special investigations for Mercury Insurance, which established a Special Investigations Unit in 1978 to help fight insurance fraud. “The goal of the SIU is to limit these payments and catch the criminals responsible. 

“Think of us as the CSI of the insurance industry. We square off against mobsters, organized crime, dirty lawyers and doctors, white-collar con artists and even the occasional celebrity to help keep down costs for our policyholders.”

Insurance fraud is a game of numbers. Insurance rates are calculated using statistics and mathematics to project risk. So, by lowering the probability for costly insurance scams, insurance companies have financial flexibility to offer customers low rates.

Making the SIU’s job tougher is the fact that the culprits behind these scams aren’t run-of-the-mill criminals. “Today’s scammers are technologically savvy and have access to sophisticated equipment,” says Bales, who’s been involved in more than 35,000 claims investigations during his 27-year career at Mercury. “They routinely produce, among other things, fake medical records, duplicate checks, and false identifications and business licenses. To maintain an advantage, our SIU is constantly working to stay ahead of the technological curve.

“I don’t want to give away any industry secrets, but on any given day, the average person is caught on camera 12 to 16 times. This allows us to pull footage or images from ATMs, intersection cams, private businesses, homes, cell phones and even social media to catch criminals in the act.”

One question Bales hears quite often is, how can consumers help fight fraud? “We have a saying: If you’re not looking for insurance fraud, you won’t find it. So, I always tell people to document suspicious activity and incidents. When it comes to cracking these cases, the devil is in the details.”

There are several common schemes of which consumers should be aware. Staged auto accidents, adding damage to vehicles after a loss and switching drivers on accident reports are a few of the most prevalent scams.

Bales says regardless of the insurance provider, when suspicious activity is observed, the witness should alert the SIU and law enforcement by calling 1-800-TEL-NICB or by texting the keyword “fraud” to TIP411.

Here are some of his other tips:

* If you’re involved in an auto accident, always call the police and document unusual circumstances or activities.

* Obtain detailed bills for collision repairs, home/property repairs and medical services.

* Never sign blank insurance claims forms.

* Watch for double-billing or unexplained charges for any service received as part of an insurance claim.

* Be aware that there are crime rings that specialize in “slip and fall” schemes, which involve fake injuries and false claims.

* Always gather as much information as possible at the scene of an accident.