People who commit an insurance fraud often think that their crime is a victimless one, but this is far from the truth. When an insurance company loses money because of a fraud, the honest people who are paying their insurance premiums are the ones who will end up paying more. Insurance fraud investigations are frequently conducted to ensure these circumstances do not occur.
If you think you have witnessed an insurance fraud, you should report it immediately. Some of the most common insurance frauds include:
1. Stolen car
One of the most common insurance fraud investigations often involve a stolen vehicle. Many criminals have tried to fraud their insurance by pretending their car has been stolen. There are different ways they can do this: they can simply hide their car, or sell it and then declare it stolen.
If they sell their car, they will either sell it overseas, with no paperwork, or they will sell it to a body shop where it will be cut up for parts.
2. Car damage
Another common insurance fraud involves damaging the car. After a small car accident, some people will make a report and receive an estimate of how much it would cost to get their car fixed. When they receive the money, they will use it for something else and leave their damaged car as it is.
The worst thing about this fraud is that most of the people who do it are not even aware of the fact that they are commiting a fraudulent act.
3. Car accident
Did you know that some car accidents were staged? In some cases, the two drivers involved in the accident are accomplices, and there are even situations where eyewitnesses and insurance investigators are involved as well.
When that happens, the value of the vehicles damaged in the staged accident will be inflated, meaning the accomplices will receive a lot of money they will be able to share among themselves.
4. Staged home fire
Home fires can be staged as well. When that happens, the homeowner will have a great alibi for not being home, and they will hire a criminal to break in and start a fire in their house.
Before the staged events, the homeowner will either insure items of a high value, or they will remove any items they want to keep from their home. Insurance fraud is a criminal offence, but so is arson.
5. Abandoned house fire
Homeowners can also stage a fire in a home where they no longer live. If they have moved away for some time, but they are unable to sell their abandoned house for different reasons, they might decide to burn it down and collect home insurance money.
Staged fires can also happen when a landlord is not able to find tenants anymore, and wants to get rid of their unpopular property.
6. Storm fraud
This is one of the most common insurance frauds that occur after a heavy storm, where many homeowners make claims for storm damage. Unfortunately, a lot of these claims are actually fraudulent.
Criminals can take advantage of a storm to report major damages, when in fact their home has only suffered minor ones. They can also make a claim when their home has not been damaged at all, knowing their insurance company will be too busy to come and check if they are telling the truth.
7. Renter’s insurance fraud
People who are renting an apartment or a home can commit insurance fraud as well. If they have renter’s insurance to cover their belongings, they can decide to sell these belongings or to get rid of them, before reporting them as stolen.
This fraud can happen whenever the renter needs money, or when they are about to move out and into another property.
8. Health insurance billing fraud
Health care professionals can commit insurance fraud as well. One way they can do this is by billing the health insurance company of a patient a much higher fee than the real fee of a procedure.
They can also bill the insurance company for a surgery, for example, when a patient only went in for a simple check-up. In these situations, the patient is the victim of the fraud.
9. Unnecessary medical procedures
When a patient is a victim of health insurance billing fraud, they usually have no clue that the fraud is happening. However, there are also situations where a health care professional will perform unnecessary medical procedures.
For example, a doctor will order different tests that have nothing to do with the problem of the patient, and will then bill the patient’s insurance company for these procedures.
10. Faked death
A criminal can take out a life insurance policy, and make their spouse the beneficiary. They will then find a clever way to fake their own death, and after their spouse has received the insurance money, they will reunite with them and move abroad.
This might sound like the plot for a movie or a book, but this is actually a very common type of insurance fraud.