A damaging traffic accident is a devastating experience for anybody, even more so if one has to struggle to prove the genuineness of the casualty and discard the suspicions of insurance fraud.

“The worst was that I had to spend extra time and effort communicating with the insurance company official to prove that I had sufficient reasons to be hospitalized,” said Lee Hye-jung, a 33-year-old medical researcher living in Seoul.

Lee was hit by a full-speed bus last October while crossing the road on her way to work, an accident which left her whth lacerations on her skull and several broken ribs.

“I understand that insurance companies have to be thorough in their inspections,” Lee said.

“But it seemed absurd to me that the process should be so exasperating ― doctors were discussing whether or not they should do head surgery and yet I had to show that my wounds were not exaggerated.”

Insurers, however, have their defense.

“People often say that one should ‘first seize one’s nape and lie down on the ground’ after being hit by a car, which shows that they take the insurance money for granted,” said an official of a major car insurance company who refused to be named.

“These people would go to any extent to get insurance money, so we have no other choice but to reinforce our investigation before paying them.”

According to the Financial Supervisory Service was 32 billion won ($29 million) swindled through insurance fraud in the first half of last year, up 109 percent from two years earlier.

Of the disbursed amount, the proportion of false hospitalization cases rose to 11 percent from 6.8 percent.

The amount of disbursements has increased every year since 2011, but the actual number of those detected for the scam has decreased, which means that each of them misappropriated a larger sum, according to the FSS’ insurance supervision department.

The casebook included a family in which each member joined over 100 insurance products and claimed 740 million won in insurance payments by faking injuries and diseases.

To prevent these scams, Rep. Park Dae-dong of the ruling Saenuri Party submitted a special bill on the prevention of insurance fraud, and Rep. Baek Jae-hyun of the main opposition New Politics Alliance for Democracy suggested adding an insurance fraud clause in the current criminal law.

But their bills, along with several similar bills, are pending at the National Assembly.

Experts point out that the core problem is the lack of public recognition that misappropriating insurance money is clearly illegitimate.

“Insurance fraud refers to an act of deceiving the insurer and taking undue money, but there is currently no explicit clause that defines the term,” said Kim Eun-kyung, professor at Hankuk University of Foreign Studies Law School.

The term “insurance fraud” is not explicitly stated in the current law, she noted.

Kim Sung, head of the public service department at the General Insurance Association of Korea, agreed.

“Insurance fraud crimes are becoming more organized every year but in many cases, not even the swindler is not clearly aware that the related act is a crime,” Kim said.

“Stating the related clause in the criminal law may boost the general sense of alarm.”

By Bae Hyun-jung (tellme@heraldcorp.com)