We sometimes wonder about the efficacy of security systems. For example, supermarkets often have elaborate security arrangements, including the purchasing of CCTV equipment and the hiring of security personnel. Many supermarkets are open 24/7, and most large businesses require at least two security personnel at all times. We surmise that all of this would cost at least $40 per hour. Does all of this really help save $1,000 or more in shoplifting losses? Is there really such a risk? Are all consumers inherently thieves?
One situation is far less problematic, and which is insurance, as evidenced by the “Auto Insurance Fraud” infographic. We do not have any first-hand experience in such cases of fraud, but we do not dispute that there are people who attempt to collect auto insurance unjustly and even if it harms another individual.
Even if the incident does not cause medical harm to a victim, it does cause financial harm. According to the infographic, these cases of fraud totaled $229 million not throughout the entire United States but in just the state of New York! (Although it is unclear if that is the total amount of fraud, or the amount of fraud on an annual basis.) Regardless, it costs each and every individual in New York $11.60.
Who needs that money more: You or the fraudster? Thus, we think that it is well worth it to spend $100 million (for example) in order to avert a loss of $229 million.
Likes: We applaud the insurance company for attempting to educate people and to minimize such losses.