Insurance Fraud Investigations
Posted in Legal Alerts on September 17, 2021
Insurance fraud investigations focus on attempts for individuals to benefit from deceitful insurance claims. It is illegal for a person to file a false or inflated claim. According to the Coalition Against Insurance Fraud, each year an estimated $80 million is paid out in fraudulent insurance claims. That amount of money changes the insurance market and causes insurance premiums to increase. There are many types of insurance fraud that are seen throughout the insurance industry affecting healthcare, disability, disaster, vehicle, homeowners, commercial insurance and more. Many insurance companies are forced to take extreme caution when paying out insurance claims to avoid being the victim of fraud. Insurers deserve to be protected from false claims which is why it is essential for all insurers to have an experienced legal team on their side to help evaluate potential fraud and misrepresentation in all areas of their insurance company.
When an insurance company suspects that they have received a false or inflated claim, there are many ways to investigate that claim to ensure its validity. Some commonly used techniques include:
- Surveillance to validate the claim
- Obtaining medical reports
- Obtaining a history of previous claims and accidents
- Insurance coverage analysis
- Speaking to witnesses
- Claimant background checks
- Obtaining physician billing history and analysis
Detecting insurance fraud is the first step in stopping fraud in its tracks. Once the suspected fraudulent claim has been detected, an investigation must begin. With the help of a legal team, insurers can begin an investigation of a personal injury, automobile accident, or property loss claim to name a few. Having a legal team on board early on in the investigation will make the process more efficient and will prevent key details from being missed. An insurance fraud attorney can conduct Examinations Under Oath or sworn statements of the claimants, witnesses, and any other parties involved to develop a comprehensive and detailed report for the insurer. The attorney will also be able to secure all necessary documentation and evidence while thoroughly investigating the claim to reach a definitive decision on how best to handle the fraudulent claim.
It is critical to leave no stone unturned when investigation a fraudulent claim. The more evidence gathered, the more detailed the case against the fraudulent claim will be. This may involve boots on the ground through surveillance of a property or claimant, speaking to the claimant’s neighbors or friends to determine a baseline for accuracy, and even checking on the claimant’s social media to see if they have given the insurer a false narrative. Social media can be an absolute goldmine for evidence that proves a claimant’s claim is fraudulent. For example, if a claimant is asking for workers’ compensation for an injured foot, but is seen posting a video of themselves on social media playing basketball with their kids or running a race, that may unintentionally expose their scheme. Some claimants who are proud of their trickery may even boast about it online, assuming their privacy settings will protect their data, however, many social media companies will hand overuse information if they are subpoenaed.
Insurance fraud investigations may also uncover fake documentation handed in by the claimant. Some commonly seen fake documentation may include
- Falsified receipts
- Fake affidavits
- Receipts of photos used for multiple claims
- An unusually large number of receipts
- Photoshopped photos or videos
Insurers and their legal teams need to pay special attention to the documentation provided by a claimant that may be fraudulent. Small details can show that the documentation is fake. Having a keen eye for editing and photoshop will also be useful in the investigation of a fraudulent claim.
A thorough, detailed, and legal insurance fraud investigation will include the following:
- Initial assessment for red flags: Figuring out the who, what, when, where, and how of the claim will allow the insurer and their legal team to form a plan for investigation that shows where the cracks may be in the fraudulent claim. This can guide how the insurance fraud investigation will be conducted.
- Completely legal investigation tactics: For any findings to hold up in court, all tactics used to investigate potential insurance fraud must be legal. This means knowing all laws related to surveillance, privacy, and more.
- Thorough and unbiased interviews with witnesses: Maintaining control of the interview process by choosing a distraction-free location where witnesses will be comfortable is one way for the insurer’s legal team to obtain information in a stress-free way. All interviews should be free from intimidation, leading questions, or threats for information.
- A detailed report of the findings: A detailed report of the findings will show the court the steps taken in the investigation, documentation and evidence found, summaries of any interviews conducted, and a conclusion as to whether the allegation of fraud was substantiated.
Many insurance fraud investigations will end in dispute resolution methods led by the insurer’s legal team. If a settlement or resolution cannot be found through these methods, the insurer may need to take the claimant to court. Having all evidence from the insurance fraud investigation will allow the insurer’s legal team to present their side with accuracy and intent to prevent the claimant from receiving compensation for a false claim.