Identifying Auto Insurance Fraud

Insurance fraud is a huge problem in the United States, causing millions of Americans to lose billions of dollars every year. Fraudsters employ creative schemes to obtain a financial benefit the illegal way. Fortunately, insurance companies are becoming better and better at spotting phony claims. 

Here are a few measures insurance companies are taking to spot fraudulent activity and make those responsible pay.

Suspicious Loss Indicators

According to the National Insurance Crime Bureau, there are certain items that are usually listed within a claim that could potentially raise some red flags. People who submit fake claims often don’t think they will get caught. If they look calm after submitting a complicated claim or hand over receipts for damage repairs written by hand, the agent might dig a little further.

Claims History

Do you have a long history of claims? You can’t blame agents for being suspicious. Everyone is capable of faking crashes or claiming the vehicle was stolen. Every time you register a loss, it goes on your records. Insurance companies are now capable of computing patterns, which could raise suspicion. 

Use Private Investigators

Sure, it sounds like something you only see in movies. But think about the millions of dollars companies lose due to insurance fraud. It makes sense to zoom in on the fraudster. Let’s say you just submitted a claim for a serious injury after your accident and are supposed to be wearing crutches. A private investigator will make sure you are indeed injured by keeping an eye on your activities, speaking to friends and relatives or digging up criminal records. Today it’s easier with the widespread use of social media. A Facebook search could be all it takes to build a case.

Fake Car Insurance Companies

This is a big problem for both the car insurance industry and the consumer. Fake car insurance policies are not that uncommon these days. To avoid these types of scams, make sure you find a reputable car insurance company. Do a little research, visit their website, talk to some of their clients and read the reviews. Remember, if a policy seems too good (and cheap) to be true, it probably is.

You got caught. Now what? Expect anything from a fine and raised car insurance premiums, to probation and, in the most extreme cases, a jail sentence. Your best bet is to stay away from committing fraud, never lie to your insurance company, and report any suspicion of car insurance fraudulent activity to the National Insurance Crime Bureau or call your local insurance agent.

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