Only tax evasion surpasses insurance fraud as the most costly white collar crime in the U.S.

And contrary to what those committing it might think, the victims are not big insurance companies, but innocent consumers. The average policy holder may actually be paying an extra $200-$300 a year because of insurance fraud.

If you find that alarming, the Western Insurance Information Service asks you to consider that a growing number of Americans believe insurance claim padding is acceptable. A recent survey found that more than one in three people think it is all right to overstate their insurance claims to make up for premiums they have paid, compared with one-in-five four years ago.

But more fraud means insurance companies have to put more resources into fighting crime, spending three times as much in 1996 as in 1992.

"As soon as we recognize fraudulent behavior, we hit it with a mallet," said a special investigation unit director for a major insurance company, comparing efforts to fight fraud with a game where players try to hit the heads of ground hogs which pop up through holes at random.

The industry is using more innovative means of combating insurance fraud, setting up investigative units, filing civil lawsuits and creating nationwide data-bases to track fraudulent activity, all of which have a cost that gets passed on to consumers in the form of higher premiums.