Insurance fraud has existed for as long as insurance has. Fraudulent claims make a hefty portion of all insurance claims. They range from small exaggerations to a deliberate accident or deliberate harm to get what the client is not entitled to.
People put their lives at risk to try and get what they think the insurance company owes them. Their dishonesty ends up costing the insurance companies billions.
Types of Insurance Fraud:
Insurance fraud is a common occurrence and poses a significant problem to insurance companies. Some examples of insurance fraud are as the following:
Life Insurance fraud is an instance where the individuals fake their own death, claim the money and turn up alive years later. The most common excuse is loss of memory or claiming to be kidnapped.
Healthcare Insurance fraud is when a person lies about his health, often exaggerating what disease or discomfort they are going through. By intentionally deceiving the Insurance company, they have them pay for their treatment along with awarding them money they have no right to.
Automobile Insurance Fraud is another common form of fraud. In this instance, the one deceiving the company often uses car crashes or fake deaths in accidents as an excuse to claim insurance money. Often, they blame other motorists, blaming them and claiming that they were the ones at fault.
Property Insurance is yet another example of fraud that people claim. They destroy or burn down properties to get the money’s worth and profit from the damage. Insurance companies then have to figure out if it was intentional or not.
Detection of Fraudulent claims happens in two steps. One is to discover if the claim is genuine of not. The claims that have a higher chance of being false, are investigated through computer forensics or computerized statistical analysis. The other is to ask around and follow suspicious claims until they find concrete evidence suggesting the person hadn’t been lying.
Tackling Insurance Frauds is a tricky business because some claims sound so genuine that they appear falsified.
There are certain suspicious activities that an Insurance Fraud Investigator can look out for.
Often people who lie about their insurance claims are unnaturally calm. They focus more on lying than on their ability to sell the lie. If someone claims their house is burnt down and is not flustered, an investigator labels them as potential suspects.
Someone who gives the insurance company hand written receipts for repairs on their cars or homes is also a likely suspect. An investigator will ‘red flag’ them and conduct an insurance fraud investigation. An incident of fire burning down a home after a family argument or a situation where members of the family were angry is also a suspicious case.
When these things happen, the investigator has these people followed or put under surveillance. Local authorities are brought in to examine the evidence and place of the incident. If there is proof of tampering or something of the like, they request for a fraud investigator. The penalty for insurance fraud can be from a few hours community service to up to ten years in prison.