Posted: Tue Apr 01, 2008 7:04 am Post subject: fraud on the rise?
i'm reporting more and more about insurance fraud on my daily insurance news blog. do you think as economic times worsen, we'll see more of this? _________________ Register Now to have your Insurance queries solved.
You bring up a good point, I think as people get more and more desperate that the possibility of fraud being on the rise is a very good possibility. I think that insurance companies are aware of this though and it will be their natural instinct to watch out for bogus claims. You bring up a good point.
I have investigated more than 2500 cases of insurance fraud in the past 15 years and I don't think it's necessarily getting any worse. I think people like us (sites like this, blogs like yours, media attention, and companies like mine) are making the average insurance-consumer smarter.
In psychology, it is taught that people are more apt to talk about things they are familiar with than something they know absolutely nothing about. Those of us who have ever spent time on a golf driving range will probably agree that the worst ball-striker in the whole place is usually the one giving the most free lessons.
Generally speaking, unless we are at least familiar with a topic, the embarrassment factor tells us to keep our mouths shut and play dumb. However, once we know even a little bit about something, we want to share it with everyone - human behavior 101.
Thus, the "smarter" insurance-consumer is now learning how to tell if a policy is bad or an agent is a lying crook and wants to tell everyone about it. From this word-of-mouth is coming increased awareness and publicity.
So, like I said, the fraud doesn't necessarily have to be getting worse, the public is just getting smarter.
With this knowlege comes the desire to share _________________ Please feel free to go to my website at www.markcolbert.com or, if you have a specific question, you can email me directly. I hope I can answer any questions you might have. If not, I can certainly find an answer right away.
It would really depend on your definition of fraud. I know….. fraud is fraud. But is there a difference of an insured having someone take their truck and burn it and then claimed it was stolen and another insured adding a couple DVDs to their inventory list of their fire claim or someone claiming old water damage on a ceiling happened a day ago when they had a hailstorm? When does minimal padding of a claim become fraud?
The general public does not see the second two as fraud since they have paid all those years for a policy that they have never used. My personal experience is that there was some degree of fraud in at least 50% of the 1st party claims I’ve handled. (3rd party claims are a whole different animal). Is it things I could prove or that the carrier would even pursue….no… but it doesn’t mean it wasn’t there.
Will the economy raise the occurrence… not sure. But I do agree with InsInvestigator, insureds and claimants are gaining more insurance knowledge. By itself this knowledge is a good thing as too many people have been insurance dumb for too long, but it also allows some people to use this to their advantage to obtain benefits that they are not entitled to.
Dasfuk, great post! You made some very good points. Let me ask you (and anyone else who reads this post) a question.
Have you purchased a life insurance policy in America since 1983?
If so, there is a 40% chance that it is bad and will never benefit anyone other than the agent who sold it and the insurance company. That's 4 out of every 10 policies in America! And this is a fact that cannot be disputed.
Trust me, in the hundreds of hours I have spent in depositions, many defense lawyers have tried to ram that fact down my throat and have never been successful. It is still on my website.
Think about it; if you lined up 10 claims adjusters, CEOs, Federal Judges,
SIU members, the butcher, baker, and candlestick maker, 4 of every 10 would be an insurance fraud victim - and they don't even know it.
That's not due to the guy who pads his claim; it is the lying, cheating, thieving, agents who to rely an trickery and misrepresentation to sell a policy. _________________ Please feel free to go to my website at www.markcolbert.com or, if you have a specific question, you can email me directly. I hope I can answer any questions you might have. If not, I can certainly find an answer right away.
one of the reasons i started my insurance blog was from my experience as an insurance reporter covering among things - insurance fraud. it is frustrating for many of the folks i talked to over the years because they don't have the manpower, and in some cases, the experience to weed out the fraud. hopefully talking about it more will make more people aware of it. for all the citizens out there that commit fraud, it has been disturbing over the years to see the numbers of people within the industry doing it too. more discussion, knowledge, etc. is a good thing as investigator said earlier. _________________ Register Now to have your Insurance queries solved.
