What is an Insurance Fraud Investigation?

Mar 28, 2014

Insurance fraud has become a massive issue in many parts of the world, more massive than you may have imagined. As insurance policies are made more rigid, the persons who commit insurance fraud become progressively more creative. While the most common of scams is pretending that an expensive item was lost and then filing an insurance claim, others have gone more daring by actually staging accidents. Some have gone as far as encouraging vehicular accidents in order to fake an injury. There are those who go into great lengths in forging vehicle title for a fictional but very costly luxury vehicle and then report the car as stolen and file an insurance claim.

An insurance fraud investigation is an in depth research done in order to determine whether a person or several persons are filing false insurance claims or not. The inquiry is usually done either by an in-house detective, or if the gravity warrants it, an outsourced insurance investigator. In some cases, it may also involve state law enforcement people. The common objective in these investigations is to establish what happened, if it was legal or not, and the people who are accountable for what happened.

Based on a worldwide survey, almost $80 billion is spent every year in payment of false insurance claims. This rise in falsified insurance claims may have a direct effect on everyone. First off, it makes insurance companies more cautious when paying claims and this can delay the process of handing out your insurance benefits even if your claim is valid. There may even be a need for you to seek professional help in making your claim which translates into additional cost. An insurance fraud investigation is done to know if your claims are false or valid. These investigations are usually performed if the insurance company has doubts on the claims that they are assessing.

Aside from being damaging to insurance firms, which stands to lose a lot of money in paying out fraudulent claims, fraud also hurts everyone who gets insurance. Insurance companies raise their premiums in order to compensate for the potential losses, something that they have already computed. The government is also affected whenever someone files fraudulent tax documents, or when another burns an establishment to collect fire damage insurance. In this particular case, the government has to respond in the personality of the fire department, and this wastes public resources.

Insurance adjusters usually recommend insurance fraud investigations when it seems that the case they are evaluating is suspicious. There are tell-tale signs when a claim is fraudulent and it includes the lack of key information, conflicting reports, and a lot more. Once fraud is detected, the insurance company may alert law enforcement informing them that someone is under suspicion. During the investigation, the fraud investigator may perform surveillance, gather information from the scene, talk to various experts, and ask law enforcement resources for assistance.

Seca Investigations:
Phone 61 3 9544 6865 / 61 3 9544 8279
Fax 61 3 9558 8980

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