Guide to Insurance Fraud Investigations in Florida

Insurance Fraud Investigations: Everything You Need to Know

Insurance fraud is a menace in the United States. This issue is so prevalent that 41 states have designed special bureaus to investigate fraudulent insurance claims and other illegal activities. Understanding insurance fraud and its repercussions is crucial—regardless of whether you work for an insurance company or are simply a consumer.

For this reason, we’ve prepared an extensive guide to insurance fraud, its impact on the insurance industry, and what to expect from an insurance fraud investigation in Florida.

Understanding Insurance Fraud

Insurance fraud is a criminal activity that involves filing a false insurance claim to a property, life, auto, or any other insurance to receive more money than what the insurer owes you. The coalition against insurance fraud estimates that insurance fraud leads to more than $80 million in losses.

According to the FBI, over 7000 insurance companies collect more than a trillion in premiums annually. It is because of this vast industry that criminals take advantage of the opportunities to commit insurance fraud. The FBI also gauges that non-health insurance fraud leads to losses of more than $40 billion per year. As a result, the average US family suffers an average of $550 in increased premiums.

In Florida, auto insurance fraud claims are widespread primarily due to it being a no-fault state. In 2011, these no-fault-related insurance fraud cases cost Floridians close to $658 million. Therefore, a household with two cars would pay close to $100 more in premiums than other US states. Thankfully, in 2012 the Florida Office of Insurance Regulations made reforms that reduced insurance fraud costs by 13.6 percent.

Types of Insurance Fraud

Two types of insurance fraud exist, namely soft and hard fraud. Soft fraud is when an individual commits fraud out of opportunity by taking advantage of an existing, legitimate insurance claim. Some examples include claiming your auto injuries are severe, yet they are not. Else, saying that burglars ruined your priceless art collection when they didn’t.

Hard fraud is the rarer of the two fraud types and more extreme. It involves concocting an insurance claim to receive benefits, including faking your death to receive the life insurance benefit or a health insurance fraud scheme. A woman was recently arrested and charged with a disability insurance scheme in Florida involving fake documentation and hospitalizations.

What Are Insurance Fraud Investigations?

Insurance fraud investigations are rigorous inquiries done to determine whether an individual or company seeks payment for a fake insurance claim. Various types of insurance fraud investigations exist; these include:

  • Health insurance. This investigation aims to discover whether the claimant uses health care compensation or if their claims are necessary. It could also be an inquiry into health identity theft- where criminals steal people’s data and use it to defraud insurance companies. An insurance fraud investigator will examine health records and hospital staff to ascertain the filed insurance claim’s validity.
  •  Auto insurance. Here, the investigator will examine whether the car accident was deliberate or rule out vehicle theft fraud.
  • Homeowners insurance. People who commit this type of fraud will lie about the damage extent from a natural disaster or burglary, or they will deliberately destroy their property then falsify supporting documentation. An investigator will, therefore, verify the validity of such claims.
  • Life insurance. In this type of inquiry, the investigator will look into your life insurance policy to check the validity of claims and rule out fake deaths, inflated premiums, forgery, fake applications, and suspicious upgrades.
  • Workers’ compensation. This investigation probes into an employee’s claim, the genuine nature of an injury, and whether the injury occurred at work. The investigator will examine various parties, including the health provider, employer, and attorney.
  • Insurance company investigation. This inquest involves investigating insurance companies for suspicion of bad faith insurance, including failure to compensate for valid claims or underpaying insurance benefits. A fraud investigator will help you collect evidence that’ll support your lawsuit and court case.

Ways to Conduct an Insurance Fraud Investigation

If you suspect fraud within your company or by a client, it would be wise to seek help from an unbiased private investigator (PI). For each investigation, an insurance fraud investigator will employ specific techniques to uncover the truth.

Here are some standard methods used:

1. Rigorous interviews

As you may well know, most private investigators were former police officers. As a result, these professionals are seasoned interviewers. Such investigators conduct thorough interviews such that they can notice any red flags in a suspected fraudster’s story.

A PI can also locate witnesses and discover new evidence that could help uncover the truth. Also, as mentioned earlier, some fraud schemes involve more than one individual. A good PI will find other involved parties and undertake rigorous interviews to extract the correct information.

2. Documents analysis

Every false insurance claim involves documentation to support the lie. A seasoned PI will examine all paperwork, including billing records and applications, to detect forgery if present. For instance, if the claimant filed an auto insurance claim, the PI would examine photos to determine authenticity, analyze the repair costs and check the police report and other documents linked to this claim.

3. Surveillance

Even if you had no clue about how a fraud investigation works, your first thought was probably surveillance. Well, you are right. Private investigators are skilled surveillance specialists who will watch the suspected offender and uncover evidence and co-conspirators. You should note that undercover work is suitable for prominent people because it is often the best way to find out whether or not they are truthful.

A PI will also perform a background check on the claimant to ascertain their identity. This investigation can uncover whether the claimant has a history of filing suspicious claims. Also, this background check will reveal the claimant’s financial situation and whether it could predispose them to commit insurance fraud.

4. Gathering documentation for court

To win a court case, you must present sufficient and irrefutable evidence, and that is where a PI comes in. A PI will gather both pictorial and video evidence, analyze and collect all documents that will be admissible, and will strengthen your case

Working With an Experienced Insurance Fraud Investigator in Tampa

Insurance fraud causes immense harm to everyone, including innocent consumers and insurance companies. As an insurer, dealing with fraudulent claims helps to prevent massive economic losses or reputation ruin. Sig 14, Inc is a competent insurance fraud investigations firm.

Working with us ensures your company uses its resources efficiently by focusing on your core services as we investigate fraudulent claims and tracking suspected offenders. Are you concerned about insurance fraud? Call us at (813) 261-1192  for a free consultation today.