How can I defend against fraudulent insurance claims?

According to a report by the FBI the total cost of insurance fraud (not including health insurance) is estimated to be $40 billion per year.  Some estimate that figure to be closer to $80 billion per year.

Regardless, that is quite a sum.  With economic conditions as they are, fraud against insurers could further increase.

Reports show that insurance fraud nationwide generally costs the consumer between $400-$700 per family each year.

Insurance fraud can take many forms but the most common are workers compensation fraud and fraudulent personal injury/property claims.

Insurance fraud schemes can take two basic forms.  Soft fraud or hard fraud.

An example of soft fraud might be where an individual exaggerates at least a partially legitimate claim for additional payout or lies about the presence of certain conditions in order to get a lower premium.

An example of a hard fraud might be where an individual purposefully destroys property in order to collect on a claim or one who falsely makes a claim for benefits.  Hard fraud is less common that soft fraud but still very costly.

One Way to detect insurance fraud is through activities checks these checks can give a clear picture of the claimant’s daily activities and can help determine if the claimant’s activities are consistent with, or contrary to, their stated limitations.

A second avenue is through social media searches. Claimants often post information regarding their activities, thinking that their privacy settings are enough to prevent discovery.  This is not entirely true. Valuable information can be obtained in the following ways:

  • Check for fake documentation of a claim or exaggerated documentation.
  • Look for suspicious loss indicators such as;
    • Adding or increasing coverage shortly before submitting a claim
    • Fire claims that occur immediately after a family dispute or immediately after a family leaves the home.
    • Handwritten receipts for repairs on covered items.

These are just a few examples.

Larger companies with established SIU’s or Special Investigative Units estimate that $10 is saved for every investigative dollar spent.  There can be a definite value in hiring an investigator to look into suspect claims.

The cost of losses due to fraud, and the cost of legal fees to defend fraudulent claims, can adversely affect company’s bottom line.

Let our team of investigators and surveillance specialists assist with the needed documentation to support the defense of potentially fraudulent claims.

We have the expertise to help document the activities of a claimant in an effort to either verify or dispute the alleged claims.  

Sometimes innovative solutions are required.  Let us know how we can assist.