Fraud is a major expense for insurance companies. Fraudulent injury claims alone cost the insurance industry nearly $115 billion annually in the United States. Insurance fraud is basically any claim that is intended to compensate an insured for an injury or loss that did not occur. Consumers are the ultimate victims of insurance fraud as these costs are passed along in the form of increased premiums and co-pays. Of the many types of insurance fraud, the following three are very common and often require private investigation to catch the fraudster.
Personal Injury Fraud
Faking an injury, intentionally causing an injury, or exaggerating the severity of an injury are all examples of personal injury fraud. The most common type of fraud is when a claimant takes advantage of a legitimate injury by inflating the claim to get a larger payout. Staging an accident to cause an injury is less common and more difficult to prove. A person can also be guilty of fraud even if they simply fail to report all of the facts surrounding an injury.
In a civil case, a private investigator can help by collecting evidence to show if an injury did occur, who was at fault, and that the injury resulted in compensable damages. Law enforcement investigates criminal aspects of fraud, but a private investigator can help with building a criminal defense case.
When the accident victim is the client, an investigator will collect evidence to support the victim’s claim for damages against the party at-fault. When an insurance agency hires a private investigator, the agent is seeking to show proof that a claimant has committed fraud or has otherwise misrepresented the extent of their injuries.
Vehicle Insurance Claims
Vehicle insurance fraud is an ever increasing problem for insurance companies in the United States. Claims adjusters review the facts of all claim to look for any red flags and to identify signs of possible fraud. When fraud is detected, an insurance company may employ a private investigator to dig deeper and find the truth.
Vehicle insurance fraud can happen by several ways. A vehicle owner can dispose of a car by burning or dumping it somewhere and then report it stolen. People often mis-report their home address to get cheaper insurance premiums. One of the more common types of fraud is when a boy shop exaggerates the repair costs to damaged vehicle to milk the insurance company. A vehicle owner can also intentionally damage their vehicle to collect an insurance payment and then never get the repairs completed.
A private investigator can review any history of previous insurance claims to identify patterns that may indicate fraud. A thorough background check will also show a history of fraud or related criminal activity. Surveillance can also help to find out if a vehicle was actually stolen or if repairs were completed as reported to the insurance company.
Faking a Death
People will sometimes go to extremes to get out of life’s seemingly impossible situations. Movies and crime dramas aren’t the only places where a person attempts to fake their own. For instance, a wealthy person who has racked up significant debt may fake a death to collect on the insurance and continue living an extravagant lifestyle under a new identity. Sometimes people fake their death to get out of pending criminal convictions and subsequent prison time. Others are simply tired of their daily routine and want a do-over.
Life insurance fraud is attempted more often than the average person might think. After all, the reward can seem to outweigh the risk for the claimant, but when it happens insurance companies take a huge hit by paying out fraudulent life insurance claims. Private investigators are often called in during suspicious life insurance claims to help find the scammers.
One of the biggest ways people tell on themselves is by keeping in touch with family members and old friends. It would be extremely difficult for most people to completely cut off everyone in their life, especially close family members. A large percentage of life insurance fraudsters finally get caught when them come out of hiding to re-connect with close family and friends.
Another indicator of life insurance fraud is when a person takes out a huge policy only months or weeks before their supposed death. In these cases, a private investigator can track the activities of loved ones to see if any contact is made with the alleged deceased. The scammers are eventually caught, facing jail time for the life insurance fraud and any other crime they may have committed in putting together the initial scam.
Hire a PI From H7 Investigative Services
Fraud is an enormous cost to the insurance industry, and scammers are becoming more sophisticated as technology continues to improve. A fraudster only has to make one mistake for them to get caught by a professional private investigator.
H7 Investigative Services conducts insurance fraud investigations in Santa Clarita, Antelope Valley, and throughout the greater Los Angeles area.
If you want to find out how our agency can help solve your insurance fraud case, call us at (661)454-7513.