Insurance Fraud

Back to: TelaClaims Adjuster II- Customer Service, and Ethics

Insurance Fraud occurs when:

• Consumers deceive an insurer for financial gain
• Insurers mislead consumers for illegal profit

There are two distinctions of Fraud

• Hard Fraud- Deliberately planning or faking a loss
• Soft Fraud-  Exaggerating a legitimate claim to inflate the indemnity

Why is fraud a big problem?  

Insurance fraud is a complex ethical issue affecting adjusters and the insurance industry as a whole. Some reports have suggested that as many as one out of four claim dollars are paid to dishonest insureds or claimants.

Types of Fraud

Staged Auto Accidents 

• Planning or staging car crashes in order to collect insurance money

Arson

• Deliberately setting fire to insured goods or property so that you can collect the insurance money

Faked Death/Murder

• Claiming life insurance money on a still living person, or murdering someone to collect the subsequent life insurance money

Health Insurance Fraud

• Corporate Health Insurance Fraud: Corporate healthcare chains overbill insurance companies
• Individual Health Insurance Fraud: a doctor may prescribe procedures that are not necessary in order to get the insurance payments

Insurer Fraud/ Internal Fraud

• Employees, managers, or executives of an insurance company stealing money from the company

Property Insurance Fraud 

• Destroying or damaging insured property or merchandise to inflate or generate a claim