Fraudulent Claims

10 Smart Ways Insurance Agents Detect Fraudulent Claims

Insurance fraud is a more massive problem than you can imagine. And people who commit it are becoming more creative day by day. If you go about looking there are the many such fraudulent claims out there – like pretending you lost your expensive car, bike, or valuable jewelry – some fraudsters cross the limit by staging car accidents. 

One such example of fraudulent claims is; that a motorbiker who is riding in front of you may suddenly apply the brakes expecting you’ll hit him; and if you do, he’ll then fake an injury. 

Another such example of fraudulent claims is; that some people deceit a fake vehicle title or registration for an unreal (but expensive) antique or luxury car, then report the car stolen and file a claim. Similarly, people also file fraudulent claims for expensive watches and paintings.

According to the Coalition Against Insurance Fraud such fraud cost Americans about $80 billion a year. Similar frauds happen across all fields like health insurance, car insurance, property insurance, and workers’ compensation. 

Its been revealed that about 78 percent of Americans are worried about insurance fraud, for some people minor rip-offs are tolerable, such as increasing a claim to cover the deductible you are supposed to pay.

Yet while there is no limit to insurance fraud, such fraudulent claims are not being ignored. Insurance companies are continuously working to stop such frauds through a comprehensive variety of means, one such means include using artificial intelligence (AI). 

So before you consider submitting a fraudulent claim, please have a look at these 10 ways in which such a claim might be investigated. And if anyhow you are found guilty, you will face a hefty fine or you might also serve jail time.

1. Properly Examine Claims History

In the past or in recent years if you have submitted a lot of claims or claimed a lot of losses; then these are immediate red flags, insurers will believe you are filing a fraud claim, and anything you submit will be closely investigated. This is especially true when it comes to homeowners and car insurance.

Insurance companies also try to recognize any patterns in your past claims. You might not be aware, but insurance companies keep in-depth records on claims and perform analyses to understand and decipher the data they contain — they can easily figure out who is most likely to file a claim when and where. In case your claim doesn’t match the typical pattern, they can easily spot it. 

2. Do go Through The Checklist of “Suspicious Loss Indicators

The National Insurance Crime Bureau (NICB) —has created a secret list of 23 “suspicious loss indicators“. These are items within a claim or its circumstances that signal the claim may be fraud or fake. The list is not really a “super-secret,” but many people submitting fraud claims have no idea that such a list exists, and this might seriously cause them a lot of trouble. 

Let’s look at some of the suspicious loss indicators insurance agents look for:

  • A person who filed a claim is calm after submitting a large claim
  • A person who submits handwritten receipts for repairs on a covered item
  • Someone who adds or increases homeowners or car insurance coverage shortly before submitting a claim

Some of these cases might be present in legit claims. But don’t worry. Insurers are completely aware that they are not positive indicators of fraud — just possible ones but certainly signs that such cases should be further investigated.

3. Hiring Private Investigators

If insurance fraud involves vehicle crashes that result in both legitimate and fake or inflated injuries. Such scams can work in several ways. 

Usually, people who are involved in such practices — medical providers or lawyers are likely to perform the same scam again over and over. If insurers observe a particular provider submitting many such claims over time for accident victims, insurers will surely consider it as a big red flag.

Smart Ways Insurance Agents Detect Fraudulent Claims

4. Using Advanced Technology to Detect Suspicious Billing 

Fraud often occurs through billing, which usually happens for medical claims. Physicians, hospitals, or clinics may heavily bill insurance companies for services never offered, an example of a fraudulent claim is; billing insurers for services that weren’t medically necessary. 

Even auto repairs commit billing fraud. In such situations, insurance companies by using advanced technology with the help of computer systems can easily detect claims where repairs appear boosted or do not match with the other claim data.

5. Hand Over the Case to the Professional/Special Investigation Unit

Many insurance companies have their special investigation units (SIU). SIUs are highly trained and have backgrounds as detectives, police officers, etc. They can perform a great number of tests and checks to find out anyone trying to commit fraud.

6. Assess Prospective Employees’ Credit Histories

Insurance fraud is not just limited to external sources. Sometimes company’s staff members also commit fraud. An example of a fraudulent claim is; that claims adjusters cut a lot of checks, and unethical employees may try to skim money off the top.

Intelligent insurance companies can prevent such fraud by running credit checks on all prospective employees. Employees with bad credit or financial issues are flagged as those more likely to commit fraud.

7. Have a Look at Claimants with the help of Social Media

Insurance companies are now using social media to look for fraudulent claims. The claimant who said his car was involved in the accident will be showing off his deception on Facebook or Instagram or any other social media or will upload a video on YouTube showing how to claim falsely on your car accident.

A quick look at a claimant’s social media photos and posts often makes it clear whether the person is true or a fraud.

Also Read: Customer Buying Journey and Claims Process

8. Get Assistance From General Public

I know you feel angry? Insurers sure hope you are. They are also increasingly vocal about asking their customers to help them out by:

By going through all bills for your medical services, car or bike repairs, etc. To make sure they list only the services and repairs that were performed.

9. Adding more Victims

Some claimants try to show that there were many people in the car at the time of the accident to increase the amount of compensation. However, the investigators and police scrutinize the accident scene and come up with a report comprised of complete details, including the number of victims. If the victim’s testimony contradicts the police report, it is a sign of insurance fraud.

10. Eyewitness Testimonies 

There are many benefits to having eyewitnesses to an accident. They are generally neutral and can give an accurate account of what happened. This can help determine whether the claimant is telling the truth or trying to change the accident details to enhance their claim.

However, fraud is a serious crime and insurance fraud can carry some harsh penalties. The risk far outweighs the small benefits that may be gained from such a practice. If you are considering insurance fraud, think twice before going through with it. The consequences could be much worse than you ever imagined.

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