Homeowner Fraud or property insurance fraud is when a person knowingly deceives an insurance company for personal gain. The motive for this crime is that concerned property is worth more when destroyed since the insurance pays for it.
In other cases, property can have goods that were insured for a lot of money and destroying them will allow the individual large amounts of money.
Common techniques for insurance fraud:
There are many ways through which individuals concoct situations that enable them to claim insurance money. These techniques include destroying properties by setting them on fire, faking a theft, renting it out, using natural disasters as an alibi and tricking elderly family members.
Out of all, the most common way to go about this is arson. Not only does this destroy property, it also makes investigating the matter harder because it gets rid of the evidence effectively. Since the fire destroys everything there is little investigators and the insurance company can do other than try and find a way to know the truth.
Another common way to commit insurance fraud is to fake a theft or burglary.
People get rid of items that have been insured in policies and claim that someone stole it. Since this cannot be proved without the police and local authorities getting involved, it’s hard for companies to determine whether the claim is legitimate or not. This is along with the previous mentioned categories are considered as a hard insurance fraud. Faking theft is one of the least damaging methods that are employed.
Other less crafty ways of fraud include renting out a property and using it commercially without the insurance company’s knowledge. People often claim the insurance on their property by distorting insurance policies or pretending not to have understood the terms correctly. Claiming a policy that costs less but pays more is also considered a soft crime.
In other scenarios, businesses that are insured use natural disasters to their advantage. An earthquake or hurricane is a good enough excuse for an employer to have his employees destroy property and blame the disaster. With no real way to investigate unless the people involved are questioned, this is the easiest to get away with.
A nefarious way to collect money that is not meant for the criminal is to trick seniors. They have their parents or elderly aunts or uncles have their property insured by numerous companies. They introduce them to insurance policies and have them sign off so that they get paid more. When something happens to the property which is insured, they take the money from all companies and scam their own relatives.
In order to counter these crimes and fight property insurance scams many companies have resorted to using private investigators. These investigators often have strong law enforcement backgrounds and know how to deal with fraudsters. Anti fraud software is a technological advancement that leaves the companies at an advantage. These can track down the defrauding parties and some of the software is developed for the purpose of predicting when the next attempt will take place.
It is crucial for companies to be vigilant of their clients and their histories. Regular check on the monthly developments is highly recommended.