If you’re unhappy with the cost of your auto insurance, you can direct much of your anger at individuals who abuse the insurance system.

A recent study by the Insurance Research Council (IRC) found that claim fraud and buildup (inflated claims) resulted in estimated overpayments of between $5.6 billion and $7.7 billion in the U.S. in 2012.

To determine that number, IRC researchers combed through some 35,000 closed auto injury claims shared by the twelve insurance companies that participated in the study.

IRC figures show a troubling increase in excess payments due to fraud and buildup. In 2002, the amount of excess payments was estimated to be between $4.3 billion and $5.8 billion. In 2007, the range was estimated at $4.8 to $6.8 billion.

“The costs associated with auto injury claim abuse make auto insurance more expensive for everyone,” said Elizabeth Sprinkel, senior vice president of the IRC. “Efforts to lower insurance costs must include measures aimed at reducing the amount of fraud and buildup in the system.”

According to the reviewers, one in five (21%) bodily injury claims and 18% of personal injury protection claims appeared to involve fraud and/or buildup. These claims were more likely than others to involve chiropractic treatment, physical therapy, alternative medicine and treatments at pain clinics.

Additionally, the researchers noted states with the highest rates of apparent fraud and buildup among personal injury protection claims. They include:

  • Florida (31%)
  • New York (24%)
  • Massachusetts (22%)
  • Minnesota (22%)

The IRC report highlights several claim handling techniques that can be used to combat fraud and buildup. They include independent medical exams, peer medical reviews and special investigative units.