March 5, 2010
Readers find flood facts surprising
Results of Insurance IQ
More than 2,000 readers took ERIE’s Insurance IQ quiz with great results. On average, ERIE Customers answered 7 out of 10 questions correctly, well above the national average of answering 4 out of 10 questions correctly in a similar quiz produced by the National Association of Insurance Commissioners (NAIC).
For some readers, the quiz spawned questions and curiosities. Here’s one reader’s letter and ERIE’s response:
Not in a Floodplain, but…
“I found the answer to the flooding question particularly interesting. I do not live in a floodplain, yet my basement could be flooded by intense rainfall. So, to discover that I’m not covered is not very comforting.”
How insurance responds to water damage can be a confusing subject. Most types of flooding are not insured by private insurance companies. The reason is that floods are too unpredictable to accurately insure against. Instead, a form of flood insurance is made available by the federal government.
Even so, flood insurance purchased from the federal government will only cover select damage in a basement, such as damaged furnaces, water heaters and other structural necessities. (Here's list of what is and isn't covered by the National Flood Insurance Program.)
Prevention is the best defense when it comes to water damage. Here's a list of things you can do to help avoid flooded basements and other water damage
Jailing the ElephantReaders view insurance fraud as a crime to fight
We received several letters in response to the fall '09 issue’s article “Paying Attention to Fraud.” The story unveiled fraud as the elephant in the room no one wants to acknowledge. Readers shared stories of times they’ve seen or experienced fraud and expressed much frustration about the topic. Here’s what a few had to say:
I recently had to file my first claim with Erie Insurance after more than 20 years of coverage. I could not have been happier with the quick service I received. However, I was dismayed with a couple of my friends who told me I should report that certain things were damaged that were not so I could get more money. I did not and would not. What was most disturbing to me was that I feel these friends are good people. Yet, they thought trying to get money that was not valid from an insurance company was okay. I am not a perfect person by any means, but I certainly try not to cheat anyone. Fraud cheats everyone. Hope the article woke up a few more people to these facts.
I read your latest Eriesense magazine with great interest. But, I was totally shocked to read that insurance companies lose $80 billion a year in insurance fraud claims. As a self-proclaimed moralist, based on your definition, I went through the following thought process when reading this article:
- Totally shocked
- Disappointed that so many insurance customers are involved in fraud
- Angry that I have to pay higher premiums to cover these fraud expenses
- What can I do to proactively help stop or report fraud? I am not personally aware of any fraud.
It’s true—$80 billion per year is shocking. But it’s not only insurance companies that pay for those costs. Roughly $30 billion affects the insurance industry directly, while the remainder of that estimate comes from higher costs to cover investigations and lost opportunities for employment, according to the Coalition Against Insurance Fraud. Fraud really is a crime that affects everyone—industries and consumers alike.
To answer your question of what you can do: be aware. Pay attention to issues of fraud that arise in the news and in your local community. Don’t be afraid to talk to friends and family about the issue to help raise their awareness of fraud as a crime that affects everyone’s pocketbook. And, if you do encounter potentially fraudulent activity related to
Erie Insurance, contact our hotline at 800-368-6696.