Indicators of Casualty Fraud

Most claims are legitimate, but many are inflated or fraudulent. Therefore, it is appropriate for the adjuster to review all claims for possible fraud. Determining the "fraud probability" of any claim is facilitated when the adjuster is familiar with various fraud indicators.

These indicators, or fraud possibility factors, should help isolate those claims which merit closer scrutiny. No one indicator by itself is necessarily suspicious. Even the presence of several indicators, while suggestive of possible fraud, does not mean that a fraud has been committed. Indicators of possible fraud are not evidence that fraud has occurred.

All suspicious claims, though they may have to be paid for lack of conclusive evidence of fraud, should be referred to NICB There is no limit to the number of cases you may refer. No claim is too small for referral.

General Indicators of Insurance Fraud

Note: Adjusters should familiarize themselves with the following general indicators of insurance fraud which may apply to more than one type of fraud scheme. After review of the general indicators, the adjuster can then refer to the more specific fraud categories which follow.

It should be noted that the following categories of fraud are separated merely to facilitate your understanding of that type of fraud However, multiple forms of fraud may appear in a single e/aim. For example, in a slip and fall products liability claim, there may also be evidence of both medical and lost earnings fraud.

• Claimant or insured is excessively eager to accept blame for an accident, or is overly pushy or demanding of a quick, reduced settlement.
• Claimant or insured is unusually familiar with insurance terms and procedure, medical, or vehicle repair terminology.
• One or more claimants or insured list a post office box or hotel as address.
• All transactions were conducted in person; claimant avoids using the telephone or the mail.
• The kind of accident or type of vehicles involved arc not typical of those seen on a regular basis.
• Claimant threatens to go to an attorney or physician if the claim is not quickly settled.
• Claimant is a transient or out-of-towner on vacation.

Indicators of Automobile Accident Schemes

• Either no police report or an over-the-counter report for an accident resulting in multiple injuries and/or extensive physical damage.
• Accident occurred shortly after one or more of the vehicles were purchased or registered, or after the addition of comprehensive and collision coverage to the policy.
• Insured has a history of accidents within a short period of time on one policy. Index returns indicate an active claim history.
• Insured has no record of prior insurance coverage although damaged vehicle was purchased much earlier than inception of policy and date of loss.
• Expensive, late model automobile was recently purchased with cash (no lien holder).
• Attorney's lien or representation letter is dated the day of the accident or soon after.

Indicators of Auto Physical Damage Fraud

• Serious accident with expensive physical damage claim but only minor, subjectively diagnosed injuries, with little or no medical treatment.
• Despite expensive damage claims, the claimant vehicle remains drivable. Often, there are no towing charges for removing vehicle from the scene of the accident.
• Claimant vehicle was struck by a rental vehicle soon after the rental had occurred.
• Claimant vehicle is not to be repaired locally, but driven or shipped out of state for repair.
• All vehicles in a reported accident are taken to the same body shop.
• Claimant vehicles are not readily available for independent appraisal.
• Reported accident occurred on private property near residence of those involved.

Indicators of Medical Fraud/Claim Inflation

• Three or more occupants in the claimant or "stuck vehicle"; all of them report similar injuries.
• All injuries are subjectively diagnosed, such as headaches, muscle spasms, traumas, and others.
• Medical claims are extensive, but collision is minor with little physical damage to vehicle.
• All of the claimants submit medical bills from the same doctor or medical facility.
• Medical bills submitted are photocopies of originals.
• Summary medical bills are submitted without dates and descriptions of office visits and treatments, or treatment extends for a lengthy period without any interim bills.
• Vehicle driven by claimant is an old "clunker" with minimal coverage.
• Insured, even though legally liable for accident, is adamant that claimants were responsible for accident, indicating that the insured may have been "targeted" by the claimants.
• Claimants retain legal representation immediately after the accident is reported.
• Minor accident produces major medical costs, lost wages and unusually expensive demands for pain and suffering.
• Past experience demonstrates that the physician's bill and report, regardless of the varying accident circumstances, is always the same.
• Treatment prescribed for the various injuries resulting from differing accidents is always the same in terms of duration and type of therapy.
• Medical bills indicate routine treatment being provided on Sundays and holidays.

Indicators of Lost Earnings Fraud

• Employment information is for an unknown business, often with a post office box for address, or a street address in a residential area.
• Business telephone number is connected to an answering machine or answering service.
• Lost earnings statement is handwritten or typed on blank paper, not business letterhead.
• Claimant started employment shortly before accident occurred, or is self-employed.
• One or more elements of claim is questionable: e.g. length of absence, rate of pay, income incompatible with claimant's residence.
• Efforts to verify lost wage statement with employer raise doubts about employer's legitimacy or about the actual employment of claimant.

Slip & Fall and Food/Products Liability

• Presence of an overly enthusiastic witness at the scene of the incident.
• No supporting evidence of foreign or contaminated substance; claimant threw food out and has only the can, box or wrapper.