Auto accidents injure Florida drivers and passengers every day. Sadly, some of the involved parties stage the accidents and fake the injuries for financial gain. The insurance company claims adjusters who handle these cases are the first line of defense against insurance fraud. As they investigate, evaluate and negotiate new auto insurance claims, they understand that they might be dealing with someone who intends to commit a fraudulent act. The steps they take are crucial to insurance company efforts to stop insurance crimes before they occur.
Insurance fraud is a claim department priority because it affects everyone. The most recent statistics published by The Coalition Against Insurance Fraud estimate $80 Billion in annual losses with property/casualty losses totaling $32 billion. Insurance companies pass on these financial losses as policyholder premium increases, so everybody loses. Insurance companies and their claim employees rely on training and a network of anti-fraud services to help them address the problem.
Insurance Company Claim Training
Insurance companies train claim employees to look for red flags that might predict fraudulent claim activity. They reinforce their basic knowledge by attending fraud seminars and continuing education classes. Insurance claim personnel obtain critical updates from law enforcement and fraud prevention agencies. They also receive notifications about new scams and fraud rings headed their way.
As insurance adjusters grow in experience, they become more aware of the signs of potential fraud. They hear subtle clues when an injured person’s version of an accident doesn’t sound quite right. They detect anomalies in medical bills and claim documentation. They see a red flag when a claimant pushes for immediate payment. When claim supervisors or managers review investigative files, they usually pick up on any evidence of fraud the adjuster might have missed.
Insurance Claim Databases
A claim handler’s instincts and training are important to detecting fraud, but they need facts to back up their gut reactions. These facts are often easily accessed when an investigator systematically submits information to nationwide claim databases.
Central Index Bureau
When an insurance company submits an injured claimant’s information to the CIB, the database generates a report back if there are any ‘hits.’ A hit may show past injury claims as well as the other parties, doctors, and insurance companies involved. It may also show if the claimed injuries are preexisting or the claimant has filed claims for the same injuries with multiple carriers.
ISO Claim Search
When member insurance companies, self-insured entities, and claim administrators submit property/casualty claim information to ISO Claim Search it becomes a part of their database. The information helps identify claim patterns, loss histories, and suspicious claims.
National Insurance Crime Bureau
The NICB is the result of a merger of the National Automobile Theft Bureau and the Insurance Crime Prevention Institute. When insurance companies submit claim data to the NICB, they analyze it and share it with member insurance companies, corporations and organizations. They also produce:
- Fraud training seminars
- Law enforcement alerts
- Crime trends analyses
- Theft and fraud publications
- Multimedia fraud presentations
Florida Division of Insurance Fraud
The Florida Division of Insurance Fraud annual report for fiscal year 2014/2015 reported 17,392 suspected fraud referrals, 1,195 insurance fraud convictions, and $51,203,744.42 in court-ordered restitution. The division accomplished these milestones with its multi-faceted anti-fraud program.
- Ongoing fraud investigations
- Fraud publications and online resources
- Online reporting process for suspected fraud
- Insurance Fraud “Most Wanted” profiles
A single red flag might not indicate a problem, but more than one can mean there’s a potential for fraud. When a CIB or NICB hit comes back on an already suspicious claimant, a bad financial history will usually prompt a payment delay and a closer look for more evidence of fraud.
The persons who commit insurance fraud are using more sophisticated techniques. Insurance companies must respond with high-tech methods of predicting and detecting their activities. Systems in current use rely on automated red flags, social network analysis, predictive modeling, and data mining from public records and other resources.
Insurance Fraud Affects You
As an insurance consumer, fraud affects you and your family. Contact us if you would like to learn more about insurance industry efforts to deal with the problem.