Billions of dollars go out as insurance claims settlements every year and a surprising number of them are not real. Insurance fraud is something that not only criminals but also common, tax-fearing citizens engage in. It is estimated that in the last year alone, nearly 80 billion dollars were paid out to fraudulent claims. It has also cost the average American $950 more on insurance premiums. People are more likely to commit insurance fraud than any other crime as it is normally considered guilt-free.
A survey found that one in four Americans feel that it is OK to commit insurance fraud. This has forced insurance companies to go for various methods to counter these activities, and private investigators play a key role in the fraud detection. Medical and accident claims are the most common followed by home insurance claims.
Types of Insurance Fraud that are Normally Investigated
The National Insurance Crime Bureau (NICB) has a record of almost every settlement. It has formed a list of 23 red flags that can prompt any insurance company to start an investigation. These are based on patterns and frequency of a person to claim damages and seek settlements. These indicators can help an insurer to ascertain if the claims made by a person follow a pattern or if the person has a repeated history of similar claims. A Private Investigator can be informed of these and an investigation can be carried out. They start off by looking for:
- The claimant’s state of mind during the claims process, whether they are too nervous or too confident in the filing and procedures.
- Submitted bills and receipts that are vague and sometimes even handwritten.
- Increasing coverage just before the incident, as though they are expecting something to go wrong.
- A fire claim, where the accident happens right after the person leaves the house or car, or right after getting into an argument.
- Medical or workman’s compensation just before the end of the contract, or if the person is a habitual claimant of work related injuries.
- Billing is another way fraud can easily done, charging slightly higher, performing unnecessary procedures on patients or even billing for treatments that were never offered can increase the bills, make the situation seem more critical than it really is and as a result raise the settlement.
Apart from these red flags, there are many who find themselves unwittingly in the center of a scam and sometimes lawyers and doctors can convince them to get higher claims than what they deserve. These types of frauds are also common. A private investigator’s work in these situations is straightforward. To look for anything suspicious that the claimant has done These investigations often get required results as fraudulent claims always leave behind a good amount of trails. Last year, over 45,000 cases were filed against fake medical insurance settlements.