Mass. Town Tackles Auto Fraud

The number of ambulance runs to accidents in Lawrence, Mass., fell sharply in the five months after the city began cracking down on automobile fraud, according to police.

The Eagle-Tribune reported in the second installment of a five-part series about auto insurance fraud that in the five months after the September fraud crackdown, there were 303 ambulance runs to accidents in Lawrence, a 67 percent drop from the 922 runs in same period a year earlier.

Meanwhile, the city maintained a 40 percent reduction in accidents, or about three fewer wrecks each day and at least 1,000 fewer accidents each year. The reduction is expected to save the city at least $50,000 a year, according to police.

“That time could have been spent doing something productive,” Lawrence Police Chief John J. Romero said.

The crackdown began after a 65-year-old grandmother died in a car crash that police say was staged to collect insurance money. Four other people were charged in connection to that fatality, and dozens of others have been charged with trying to concoct similar scams in that city.

An Essex County sheriff’s deputy and a Lawrence police officer have also been disciplined for their roles in providing auto accident reports to a Lawrence chiropractic clinic caught in the crackdown.

The rampant insurance fraud has had various consequences:

_ Under the state’s current insurance system, residents of less accident-prone towns subsidize insurance payouts in high-risk cities like Lawrence, Boston, Brockton and Springfield. The state’s auto insurance rates were the fifth-highest auto insurance premiums nationally in 2001, the last year for which data was available.

_ Insurance rates for Lawrence residents are on average almost twice what the rest of the state pays to insure their cars.

_ Many residents in Lawrence and other communities north of Boston illegally register cars in New Hampshire to avoid high insurance rates. In New Hampshire the average insurance premium is $730, compared to $1,047 in Massachusetts and $2,015 in Lawrence. Two years ago, state officials estimated that the practice costs the state about $50 million in lost excise and sales taxes.

The questionable claims from some Lawrence residents have cast suspicion over real claims in the city, driving down the average insurance payouts to people who have suffered real injuries.

“I have a patient who was delayed in treatment because of her mother’s concerns about the stereotype of car accident victims,” said Dr. Mark Sofia, of Sofia Chiropractic in Lawrence.

Insurance agent Leonard J. Degnan Jr., a former Lawrence mayor and city councilor, said accident victims may feel like there are just “too many eyes on them” now and their claims won’t sail through as in the past.

“Suddenly, the public cares,” he said. “And the pressure is on the insurance industry, the police, the prosecutors and the attorney general because they know people care.”

Mayor Michael J. Sullivan said there’s another cost to his city, not easily measured in dollars: The number of people driven away by the high insurance premiums.

“It’s a quality of life issue, a factor when someone is planning on purchasing a home here,” Sullivan said. The extra $1,000 it costs to insure a car in Lawrence is like an added mortgage payment, he said.

Lawrence resident Rafael E. Beamud said that if he moved down the street to Andover, he’d pay about $2,000 less each year to insure his three cars.

“It’s crazy,” the 43-year-old Cambridge police detective said. “I pay $6,000 a year in car insurance because I live in Lawrence, and I’ve got a perfect driving record.”

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