5 Common Facts About Insurance Claims Fraud

Facts about insurance claims fraud.

The FBI reports that insurance fraud costs the average family between $400 and $700 each year. One common type of insurance fraud is insurance claims fraud.

Insurance claims fraud occurs when an individual or entity exaggerates or fabricates information for the sake of filing an insurance claim. The primary goal of these dishonest claims is simple: to obtain a payout (or larger payment)  from the insurance company. Here are a few common facts that you should know about insurance fraud.

Insurance Companies are not the Only Victims

It’s a fallacy that insurance companies are the only ones who have to pay the price of insurance claims fraud. While insurance fraud certainly impacts the insurance company’s bottom line, ordinary consumers are also negatively impacted

The overall cost of insurance premiums is higher due to the losses associated with insurance claims fraud. Customers who file legitimate claims that are impacted by fraud will find that the additional costs increase the price of their personal insurance premiums.

Fraud Can Occur Any Time During the Claims Process

The insured individual isn’t always the one who’s committing insurance fraud. It’s possible for another party involved in the repair or claims process to pad the costs for their benefit.

For example, assume that a driver makes a valid claim on their auto insurance after an auto accident. The body shop that’s repairing their vehicle inflates the cost of the materials and adds unnecessary work to the claim to increase their portion of the payout.

There are Numerous Ways to Fight

Fortunately, there are multiple options for combating insurance fraud. Insurance companies utilize predictive modeling and link analysis to learn more about the relationships and events connecting specific places, businesses, and people. This can help uncover suspicious or fraudulent claims. Databases are also available to assist with the detection of similar or related claims.

Some companies, like those in the healthcare, automotive, and legal industries, are notably susceptible to the effects of insurance claims fraud. These companies will benefit from the services of an insurance fraud investigator. The investigator can gather the evidence they need to prove suspicious claims are fraudulent.

People Often Overlook Insurance Fraud

It’s common for consumers to overlook and even fail to report insurance fraud. This is true even when the individual typically prides themselves on having morally responsible behavior. The person might think that the insurance company “owes” them money after they’ve faithfully paid their claims for years.

Or, they might think that companies deserve to lose money to fraud because of their own personal experiences filing legitimate claims. This unwillingness to intervene can make it more cumbersome to identify fraudulent or exaggerated claims.

An insurance fraud investigator is one option for dealing with consumer inaction. Insurance fraud investigators are trained to use technology, data, and surveillance to aid in the detection of claim fraud. A private investigator might interview witnesses to see if the severity of the incident is being exaggerated. Or, they may gather info to prove that a claim has been fabricated.

Those Who Participate in Insurance Fraud are Often Repeat Offenders

Most individuals who attempt insurance fraud are repeat offenders. This isn’t the first, or the last, time that they’ll try to file a bogus claim in hopes of getting an easy payment.

One way to minimize the impact of these repeat offenders is to order background checks in Tampa for your employees, business partners, customers, and industry associates. A background check will alert you if the individual has a history of filing claims that have no merit or engaging in other dubious behaviors.

Contact Sig 14 or Insurance Fraud Claims Investigations in Tampa, Florida

Concerned that your company is a victim of insurance claims fraud? Contact Sig 14 Investigations at 813-261-1192 to consult with a Tampa private detective.