Claxton & Claxton, LLC: Fraud Indicators

	Fraud Indicators

Indicators of Vehicle Theft Fraud

Most claims are legitimate, but some are fradulent. 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 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 "red flags" only, not actual evidence.

Some claims, although suspicious, may have to be paid for lack of conclusive evidence of fraud; however, they should be referred to NICB for further review.

All vehicle thefts and all sales of total loss salvage sold by your company or left in possession of the claimant at the time of total loss claim settlement should be reported to NICB. Total loss slavage should include the current and four preceding model years as well as older model years if the vehicle is an expensive sports car, a truck-tractor, or any other valuable or luxury vehicle for manual reporting companies. Electronic reporting companies should report all model years.

Indicators of Fraud Concerning the Insured
Insured:

Has lived at current address less than six months

Has been with current employer less than six months

Address is a post office box or mail drop

Does not have a telephone

Listed number is a mobile/cellular phone

Is difficult to contact

Frequently changes address and/or phone number

Place of contact is a hotel, tavern, or other place which is neither his/her place of employment nor place of residence

Handles all business in person, thus avoiding the use of mail

Is unemployed

Claims to be self-employed but is vague about the business and actual responsibilities

Has recent or current marital and/or financial problems

Has a temporary, recently issued, or out-of-state driver's license

Driver's license has recently been suspended

Recently called to confirm and/or increase coverage

Has an accumulation of parking tickets on vehicle

Is unusually aggressive and pressures for quick settlement

Offers inducement for quick settlement

Is very knowledgeable of claims process and insurance terminology

Income is not compatible with value of insured vehicle

Claims expensive contents in vehicle at time of left

Is employed with another insurance company

Wants a friend or relative to pick up settlement check

Is behind in loan payments on vehicle and/or other financial obligations

Avoids meetings with investigators and/or claim adjusters

Cancels scheduled appointments with claim adjusters for statements and/or examination under oath

Has a previous history of vehicle theft claims

Indicators of Fraud Related to the Vehicle
Vehicle:

Was purchased for cash with no bill of sale or proof of ownership
Is a new or late model with no lien holder
Was very recently purchased
Was not seen for an extended period of time prior to reported theft
Was purchased out of state
Has a history of mechanical problems
Is a "gas guzzler"
Is customized, classic, and/or antique
Displayed "for sale" signs prior to theft
Was recovered clinically/carefully stripped
Is parked on street although garage is available
Was recovered stripped, but insured wants to retain salvage, and repair appears to be impractical
Is recovered by the insured or a friend
Purchase price was exceptionally high or low
Was recovered with old or recent damage and coverage was high deductible or no collision coverage
Coverage is only on a binder
Has an incorrect VIN (e.g. not originally manufactured, inconsistent with model)
VIN is different than VIN appearing on the title
VIN provided to police is incorrect
Safety certification lable is altered or missing
Safety certification lable displays different VIN than is displayed on vehicle
Has theft and/or salvage history
Is recovered with no ignition or with steering lock damage
Is recovered with seized engine or blown transmission
Was previously involved in a major collision
Is late model with extremely high mileage (exceptions: taxi, police, utilitiy vehicles)
Is older model with exceptionally low mileage (i.e., odometer rollover/rollback)
Is older or inexpensive model and insured indicates it was equipped with expensive accessories which cannot be substantiated with receipts
Is recovered stripped, burned, or has severe collision damage within a short duration of time after loss allegedly occurred
Leased vehicle with excessive mileage for which the insured would have been liable under the mileage limitation agreement

Indicators of Fraud Related to Coverage

Loss occurrs within one month of issue or expiration of the policy
Loss occurrs after cancellation notice was sent to insured
Insurance premium was paid in cash
Coverage obtained via walk-in business to agent
Coverage obtained from an agent not located in close proximity to insured's residence or work place
Coverage is for minimum liability with full comprehensive coverage on late model and/or expensive vehicle
Coverage was recently increased

Indicators of Fraud Related to Reporting

Police report has not been made by insured or has been delayed
No report or claim is made to insurance carrier within one week after theft
Neighbors, friends, and family are not aware of loss
License plate does not match vehicle and/or is not regstered to insured
Title is junk, salvage, out-of-state, photocopied, or duplicated
Title history shows non-existent addresses
Repair bills are consecutively numbered or dates show work accomplished on weekends or holidays
An individual, rather than a bank or financial institution, is named as the lien holder

Other General Indicators of Vehicle Theft Fraud

Vehicle is towed to isolated yard at owner's request
Salvage yard or repair garage takes unusual interest in claim
Information concerning prior owner is unavailable
Prior owner cannot be located
Vehicle is recovered totally burned after theft
Fire damage is inconsistent with loss description
VINs were removed prior to fire

180 Interstate North Parkway
Suite 115
Atlanta, GA 30339
770.933.1946
claxton@claxtonclaxtonllc.com