Here's how insurance fraud hurts all consumers

FARGO, N.D. (Valley News Live) - A Fargo man is being charged for insurance fraud. Scott Goebel is accused of intentionally causing car accidents in Fargo over the past few years—racking up thousands of dollars. And it's not just the insurance companies that pay up. Here’s how the money from each insurance claim comes out of your pockets as well.

N.D. insurance commissioner, Jon Godfread, says a local insurance agency first tipped him off about a Fargo man who fraudulently claimed a total of $22,985 in car wrecks.

"This guy's had something like 19 claims in the past couple months," Godfread said the insurance company—which he declined to name—told him.

But what many of us don't know is with every false claim, we all become victims—whether involved in the crash or not.

"Insurance at its very heart is basically pooling risk, right,” Godfread said, “so we all join a pool together. So basically if something happens, that money pays us out, right?"

Scott Goebel has been charged with insurance fraud; not only causing accidents to collect—but then trying to collect again.

"There are cases where there wasn't even an accident,” Godfread said, “and he's just filing that same claim. So he's getting paid three, four, five, six times on the same damage."

Each claim filed, Godfread says, takes more money out of all our pockets.

So aside from the obvious risk of causing an accident—and increased insurance to the parties involved—everyone else's premiums also increase, to help pay out the claims.

"That then we all have to make up because he wanted to make a quick buck," Godfread said.

The Cass County State’s Attorney says if Scott Goebel is found guilty, he could spend up to 10 years in prison and be fined $20,000—in addition to paying back the nearly $23,000 in fraudulent claims.

Meanwhile, a Bismarck man also allegedly racked up more than $5,000 in false insurance claims. Godfread says this man was causing accidents in high school parking lots, taking advantage of less experienced drivers. He eventually got caught after he bumped into the child of an insurance agent. The agent thought it sounded suspicious, and after taking it to officials, found the man had about eight claims from that same parking lot.

According to the N.D. Insurance Department, insurance fraud is the second most profitable crime here in the U.S.—only behind illegal drug sales. It costs consumers between $80-120 billion each year.

Godfread says on average North Dakotans pay an additional $950 per year in premiums, thanks to insurance fraud.

"That's real money," he said.

Money the state insurance department is trying to get back. Godfread says there’s no need to confront someone directly at the scene of a crash—but to reach out to his department.
"If something doesn't feel right, we just ask that you give us a call,” Godfread said, “and then we can take it from there."