Advice For Detecting Insurance Fraud In An Insurance Defense Case

How to detect insurance fraud

Insurance fraud is one of the classic defenses in an insurance case. When an insurer is faced with the prospect of paying significantly on a claim, evidence of fraud is examined closely. But it’s not enough to allege or suspect fraud on the part of the policyholder. You need a dedicated New York insurance defense attorney who is ready and able to prove it. These are some tips for detecting insurance fraud in your case.

The Role of an Experienced Investigator

You will need a dedicated fraud investigator who can examine the case more closely. Obviously, this should be someone experienced with the particular type of insurance fraud suspected. But a good investigator is always on top of the next wave of insurance fraud.

Fraud is dynamic. Scammers are always looking for new ways to rip off insurance companies. However, you may not be dealing with a professional or organized ring of fraudsters. The ones trying to commit the fraud could be average people who feel like they have no choice. They aren’t necessarily sophisticated criminals trying to reap ill-gotten gains. An investigator has to be aware of the latest trends in fraud, regardless of who may be perpetrating them.

An experience insurance investigator can detect insurance fraud

What Are Some Red Flags for Fraud?

Sometimes the evidence of fraud is not so much in the claim itself, but circumstances surrounding it. Experts within the insurance industry are aware of certain red flags that could suggest fraud. They include:

  • The policyholder was in financial distress shortly before making the claim
  • The claim is filed shortly after the coverage began
  • Increases in policy limits right before a claimed loss
  • Valuable items were removed from a property just before a fire or other catastrophe
  • Personal injuries, like slips and falls, with no witnesses
  • Documentation that is missing or altered
  • Delays in the policyholder reporting the loss

As you can readily tell, most of these red flags involve timing. It’s important to understand that no single red flag is necessarily indicative of fraud. Denying a claim where there was no reasonable evidence of fraud could land an insurer in hot water. So every piece of evidence must be taken in concert before insurance fraud can be concluded. But your attorney and investigator will be interested to know if these or other red flags are present.

Back to the Basics

There are also cases in which the fraud is relatively simple. Maybe the policyholder was sloppy in attempting fraud, or wasn’t savvy enough to pull it off. You and your attorney always have to be on the lookout for basic evidence of fraud.

This sounds self-evident, but many insurers try so hard to find fraud they ignore the most obvious signs of it. For example:

  • Were multiple claim checks sent to the same address?
  • Is the claims history suspect?
  • Did the policyholder not even own the property claimed?
  • Is there more than one policy covering a piece of property?

These and other questions can be answered relatively easily. But it means making sure you and your attorney do your homework and don’t overlook the basics.

Are You An Insurer Defending Against A Claim? Our Attorney Can Help

The New York insurance defense attorneys of Rosenbaum & Taylor have experience handling fraud cases. We also work with insurers on other types of claim denial cases, like those involving lapsed policies. Regardless of why your company is being sued, we can defend you in court. Call us today to learn more.

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