Everyone has the sole responsibility to stop insurance fraud by contacting designated regulatory body for insurance companies in UK or the United States, giving as many details as you possibly can about the fraud that you witnessed.
Consumers of various insurance plan should learn to be vigilant in identifying various insurance fraud perpetrated by dishonest people out there seeking to reap off insurance companies.
There are two different things that could cause someone to report insurance fraud.
The first one is reporting an insurance company or an insurance agent for an act of fraud against us.
The other is reporting an insurance consumer for fraudulent action against an insurance company.
So depending on the type of insurance and fraud involved, be it medical insurance fraud, the proper reporting steps can differ from one place to another. The best thing is to know who to immediately contact when there is insurance fraud.
Before you can report someone for insurance fraud to the National Insurance Crime Bureau, you need to be conversant and acquainted with different strategies that people used in committing fraud.
Extreme List of Insurance Fraud Statistics
According to the RGA 2017 Global Claims Fraud Survey, 1 in 30 claims are reported as fraudulent globally.
The Coalition Against Insurance Fraud estimates $80 billion in fraud a year for all the different types of insurance.
Examples of Insurance Fraud Cases
1. Car Accident Insurance Fraud
This is a staged accident that usually involves two drivers who have decided to commit this outrageous fraudulent act in a bid to deceive the insurance companies for claims.
Sometimes the victims, insurance investigators and even some observers that give statements are all together in the fraud.
Most times they inflate the insurance payoff for the cars involved in the accident.
2. Car Theft Insurance Fraud
Car theft is when a car owner sells his car to someone and then reports the car as stolen.
The car could be sold to a buyer in a distance land, especially selling it outside the United States, making the transaction without any paperwork to avoid being traced and then reporting the car was stolen.
3. Car Damage Insurance Scam
Sometimes people will report damage to their car, get a false estimate for damages from the repairer which is always done in conjunction with the repairer, collect the insurance check and then not get the car fixed.
This type of auto insurance scam is very common in UK and it happens constantly.
The insurance company makes payments from premiums paid by other customers.
4. Health Insurance Fraud
This type of insurance fraud happens when health care providers bill health insurance companies a high fee for a standard procedure, or to bill for services that were never rendered.
A perfect example of this health insurance scam was what happened to Molly McKenna when she was billed $40,000 despite having health insurance.
Related: The Impact of Insurance Fraud in the US
Take for example someone go in for a regular check-up that cost to nothing but your doctor decides to bill your insurance company for a surgical procedure that never happened.
The patient in this scenario is the victim of insurance fraud and does not even know about it.
Sometimes your doctor will be ordering you to go for unnecessary testing that is not needed, when you noticed this then it’s a red flag and you should beware and exercise caution.
5. Home Fires/Vandalism Fraud
Homeowner’s insurance fraud costs insurance companies and their customers in UK and the United States billions of dollars each year.
One of the most common forms of home insurance fraud is the staged home fire fraud which on a normal situation can be termed as vandalism.
Most times Criminals are hired to set fire to the home, or break in and vandalize the home to make it look like the homeowner was victimized, which is always done after the homeowner has removed important family items before the vandalism takes place, or the homeowner makes sure that the insurance company knows the value of the expensive items in the house before hand and then has them destroyed in the fire incidence.
Related: How and When to Hire a Lawyer to Sue for Property Damage Claim
6. Faked Death
This type of insurance fraud is so common that it has been depicted in so many movies and television shows.
What usually happens is that someone will take out a life insurance policy on him and make his spouse the beneficiary.
After several months the policy has been in effect the insured person fakes his death and leaves the territory while his spouse is paid the death benefit.
After the funeral the spouse disappears to meet her husband.
Why It’s Important to Report Fraud
Insurance fraud affects everyone in one way or the other. When our insurance premiums go up, this may be because an insurance fraud has occurred.
If you notice any insurance fraud that has been committed, then the best thing to do is to report the incidence to the regulatory body that monitors the activities of all insurance companies in your state immediately.
Policyholders who are experts in perpetuating fraud is one of the 3 kinds of insurance clients you don’t need.
Different Ways You Can Use to Report Insurance Fraud
1. Gather Information and Facts
Make sure you have collected all of the appropriate documents, names, dates, and other important information available to you, and have the information with you when you report the fraudulent activity.
The Agency or regulatory body you are reporting to are very busy and are more likely to take your report seriously if you have the proper documentation.
2. Call Your Insurance Company
If you are the victim of insurance fraud, then start by calling your insurance company.
Related: List of Insurance Companies
Most insurance companies in UK, Australia and the United States have internal departments like the anti-fraud departments which sole responsibility is to look into insurance agents suspected of fraudulent activities.
3. Call Your State’s Insurance Fraud Bureau
Every state has its own government-funded insurance fraud bureau and they are always available to assist.
Contact Law Enforcement Agent
You can take a step further by reporting fraudulent activities to law enforcement body which will make your insurance company to sit tight during fraud investigation.
Insurance fraud is an act against humanity. Please note that insurance scams put people’s lives and property at stake and we should not tolerate such a wicked act in our society. So if you see something, please report it immediately.