It's cheaper for big insurance because instead of conducting an investigation, they just turn around and raise the employers workers comp rates after settling a fraud case....It's a win win for big insurance, but a lose lose for employer.
And big insurance and others run around wondering why the fraud is so rampant?
It's like the guy who claimed a back injury, employer files WC claim, he's off work for several weeks, paid...Employee comes back to work while still off one day to pick up his pay check...Goes back to the employee parking lot to leave and his vehicle is gone...Goes back into his employers office and tells them his vehicle was stolen.
So now employee sues the employer for not providing adequate security in the employee parking lot on top of his workers compensation injury claim.
Through investigation, it's discovered his vehicle was being dismantled for parts at his cousins home a few miles away. In addition, it's discovered the employee had insured the same vehicle for auto theft with several insurance companies in several different states, and collected about $45,000 on a 13 year old vehicle...
The fraud is through the roof, but big insurance worth tens of billions, would rather settle with those committing fraud than conduct investigations and go after those committing the fraud.
They occasionally save a few bucks just settling with these criminals, but then turn around and pass off the cost off on the employer in the form of higher workers compensation rates.
It's just outrageous.
Big insurance conducted investigations into the use of non-oem parts in motor vehicle repairs in Illinois ~ and fixed the problem ~ they don’t reimburse anything with oem replacement cost ~ but they did discover parts they’d marked getting recycled from wrecked cars to newly wrecked cars all over the country.