- Suspicious vehicle fires rose 20 percent during the first half of 2009 compared to the same period last year, as noted by the National Insurance Crime Bureau (NICB)
- Slip and fall cases were up 60 percent on casualty policies and 77 percent on commercial policies
- Questionable Workers Compensation losses rose 71 percent
- Shady auto glass claims soared 76 percent
- Product liability claims zoomed 90 percent
- Suspicious hail losses jumped by 407 percent!
- All in all, the NICB received 41,619 questionable claims in the first half of 2009, compared to 36,743 for the same period in 2008.
A bad economy is a primary driver of these increases. A hardcore group of people live off insurance fraud as a normal part of life. Plus, as the economy grew worse, SIU saw more amateurs jumping in, seeing fraud as a quick way to make some money. Most of these novice fraudsters do not think beyond the dollar sign or realize the basic errors they make when presenting a claim. It is similar when people try several different schemes and cannot keep track of their lies; they often provide conflicting information that leads us to conclude it is a fraud case.
Wrestling, Aliases, Murder and Global Conflict
SIU handles losses involving every section of society – from the college student and the organized crime member, to the corporation head and homeless individuals. Some examples include:
- In a recent slip and fall claim resulting in injuries to the back, neck and legs from slipping on spilled coffee, the claimant forgot to mention he was still working as a professional wrestler and at a male escort service. It seems he was not as injured as he wanted everyone to believe.
- In a pending case, a review of the claimant’s background revealed 4 aliases, 12 Social Security numbers and 7 injury losses. This information will be put to good use in impeaching the witness who has also conveniently forgotten about the losses, identities and different Social Security numbers.
- Fraud can become dangerous. A State Fraud Investigator in North Carolina was auditing the records of an insurance agency (not a Utica agent-customer) suspected of pocketing premiums. Her initial review found indications of fraud, but she disappeared two days after starting the review. Her car was found nearby – and her body not long after. Blood was found on the carpet at the insurance agency and on a computer cord. As a result of the investigation, the agent pled guilty to murder and is expected to serve up to 35 years in a state penitentiary.
- Losses involving international issues do not come along often. Some appear to have connections with global crime groups and could very well involve terrorists and financing their activities. A recent E&O claim has brought us closer to the major issues involving global conflicts. It includes players whose companies trade in weapons made in the Ukraine and destined for the government of Pakistan. The loss involving our business is the alleged under-insurance issue on a total loss fire of a home and contents in excess of $13 million. Based on the background of those involved, numerous issues of forgery, fabrication and perjured witnesses, I suspect we will have an impact on this round of claims. The parties involved have started related suits in Pakistan, England, Washington, D.C. and federal court in Oregon.
While some fraud investigations are more intriguing than others, the effort to prevent fraud is of equal importance across the board. The following indicators do not constitute evidence, but are some “red flags” we can all watch for:
- The insured handles all business in person rather than using the mail (to avoid mail fraud charges), is difficult to contact, is unemployed, has lived at their current address or been with their current employer less than six moths.
- Coverage is added to a policy, and then suddenly used for losses occurring the same day or shortly thereafter. In many cases, the loss has already occurred and the addition of coverage is used to obtain payments after the fact.
- The policyholder is unusually knowledgeable regarding insurance terminology and the claims settlement process, and has an extensive claim history and is overly pushy for a quick settlement after a loss.
