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5 Methods Insurance Companies Use To Identify Bogus Claims

Insurance is made to keep assets financially safe and secured. This can cover various things such as your home, your business, your jewellery, your vehicle and so much more. Nowadays, you can cover practically everything around you, lowering your chance of losing anything you value financially.

And because this method of asset protection is so excellent, many people have a tendency to abuse it. Insurance fraud is now one of the most frequent problems most countries face today. Fraudulent individuals used the policies and regulations and turned them to their advantage in the most creative ways.

A popular example would be property insurance for people who purposely burn down their homes to get insurance money. And because insurance fraud is now so common, insurance agencies today have found a way to spot bogus claims.

If you’re curious to know how they do it, here’s a list of the most common techniques they use:

How Do You Spot A Bogus Claim Using: Claim History?

One of the first things an insurance company does to check if you’re filing a bogus claim is: Check your claim history. If an insurance holder has made an excessive number of claims in the past, this might instantly raise an alarm, especially if the same policy has been used repeatedly.

When you file a claim, this instantly gets documented by the insurance agency. When analyzing your records, they’ll usually use a variety of techniques to spot a pattern of irregularities such as when it was filed, who it was filed by, why it was filed and so on.

How Do You Spot A Bogus Claim Using: A Private Investigator?

If you already happen to be on their watch list, the next time you file a claim, they usually get private investigators to look into you. This investigation goes as deep as knowing where you live, who you live with, where you work, who you work for and so on.

Once they get needed information about you, they use it to determine if your claim is fraudulent or not. They also employ less dramatic strategies to detect fraud, such as investigating the histories of claims by looking through criminal records, speaking with claimants and any witnesses, and examining relevant places.

How Do You Spot A Bogus Claim Using: Suspicious Loss Indicators?

Because of the severity of insurance fraud, the National Insurance Crime Bureau or NICB has come up with a checklist of ‘suspicious loss indicators’ to examine if a claim is fraudulent or not. To give you an idea of what the checklist contains, here are some indicators:

  • When an insurance holder files a claim and provides handwritten invoices for repairs made to an insured property.
  • When an insurance holder is calm and collected after filing a large claim.
  • When a seasonal employee files a medical claim and is undergoing rendering from work or whose job contract is about to end.
  • When an insurance holder increased insurance coverage shortly before filing a claim.
  • When an insurance holder files a fire damage claim after a conflict with family, partner or friend.

How Do You Spot A Bogus Claim Using: Cross-Check Inspections?

Cross-checks are one of the easiest ways to know if a claim is fraudulent or not. Cross-checking involves looking for trends in the cheques that are sent out to settle claims. The inspector will raise a concern if they see big checks being issued to a certain individual or certain address frequently.

How Do You Spot A Bogus Claim Using: Social Media?

Because social media is basically everyone’s online diary, this becomes useful in terms of spotting bogus claims. An example of how this method can be used is: For instance, an insurance holder files a claim stating their vehicle has been damaged.

The insurance company can look you up online and see if you’ve posted or shared anything in relation to the incident. They can catch insurance holders lying about their claims by posting their functioning and undamaged vehicle online.

How Can I Prevent, Being An Instrument Of A Bogus Claim?

One of the best ways to prevent being used for a fraudulent claim is by getting an insurance advisor. They’ll be able to offer you quality advice with anything that involves insurance.

An insurance advisor is a professional that specialises in insurance and risk, so you can count on them to offer you nothing but the best advice when it comes to your coverage and anything related.

Plus when you’re already caught up with the bogus claim, your insurance advisor can help you with what you can do to counter it and resolve it.

Related posts:

  1. Different Insurance Policies For Different Reasons
  2. Why You Should Get Insurance?
  3. Insurance Experts Sharing The Best Investment Plans
  4. Critical Illness Insurance Benefits And Illnesses Covered

Filed Under: Insurance Tagged With: Insurance Advisor

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