How to Spot Questionable Activities in Insurance Claims

When reviewing insurance claims, it is crucial to watch for signs of questionable activity that could indicate fraud or abuse. As a risk management or human resources professional responsible for your organization's insurance and benefits programs, you need to protect your company from improper claims that can cost thousands in unwarranted payouts. By understanding common red flags and partnering with an experienced investigation firm like Frasco, you can catch questionable claims before they drain your reserves. With Frasco's help, your team will learn what details to look for, how to thoroughly investigate suspicious situations, and when to bring in the professionals. Read on to gain valuable insights that will strengthen your claims review process.?

Common Red Flags in Insurance Claims?

Delays and Avoidance?

Delays in reporting a loss or avoiding contact are major red flags. Claims should be reported promptly, and the insured should be cooperative in providing information. If there are excuses for delayed reporting or the insured is difficult to reach, it could indicate fraud.?

Inconsistencies?

Inconsistencies in the information provided are suspicious. For example, if the police report, insurance application, and claim documents contain different information about the vehicle owner, address, or other details, it may point to fraud. Inconsistencies in the descriptions of damages, facts of the loss, or injuries can also be a sign of deceit.?

Pushy or Evasive Behavior?

Both pushy, aggressive behavior demanding a quick settlement and evasive behavior avoiding meetings or questions can be problematic. While wanting a prompt resolution is understandable, refusing to provide documentation or threatening adverse action if demands are not met is inappropriate. Similarly, canceling appointments, not answering questions directly, or being uncooperative in the claims process may indicate the insured has something to hide.?

Familiarity with Insurance?

An unusual familiarity with insurance terminology and processes can raise questions, especially if the insured is eager to retain salvage or accept blame. Of course, working in certain professions like legal, medical or automotive fields could explain greater knowledge. However, if combined with other indicators like a history of financial hardship, the insured’s familiarity may point to planning a fraudulent claim to exploit the system. Overall, it is important to consider both the specifics of the claim and the totality of the circumstances in determining if there are reasonable grounds for suspicion.?

How to Detect Fraudulent or Exaggerated Claims?

When assessing insurance claims, there are several indicators that may point to fraudulent activity or exaggeration of damages. Vigilance and skepticism are key.?

Be on alert if a claimant’s account of events seems implausible or if their memory appears selective. For example, a claimant who cannot recall basic details you would expect them to remember but has a suspiciously clear recollection of complicated insurance terminology or legal procedures may warrant further investigation.?

Similarly, be wary of claimants who are uncooperative or evasive when asked for documentation or if their version of events contradicts known facts. Threats of legal action or adverse publicity to force a quick settlement are also red flags.?

Scrutinize the details of the claim itself. Damages disproportionate to the supposed cause of loss or inconsistent with the type of accident alleged should raise suspicion. Carefully inspect any physical evidence of damages to determine if pre-existing flaws or unrelated damage are being misrepresented as newly incurred.?

Examine the relationships between parties involved. Claims with close connections between claimants, witnesses, and other parties — such as family or business ties — require extra diligence to verify the legitimacy of the loss. Previous associations between the parties denied during the claims process are a significant warning sign.?

By closely analyzing the plausibility, transparency, consistency and independence of insurance claims, questionable activities can often be detected before unjustified payments are made. Diligent claims investigation helps to reduce losses from fraud and ensure that benefits are properly paid to those truly entitled to receive them.?

Interviewing Involved Parties?

Professional investigators are highly skilled at conducting in-person interviews to gain insights from all parties involved in a claim. They ask probing questions to identify inconsistencies in accounts of events. For example, if witnesses provide different versions of the cause of an accident or the sequence of events, this may point to a fraudulent scheme. Interviews can be a revealing tactic for validating or disputing suspicious claims.?

Leveraging experienced investigation services helps ensure that insurance claims are handled accurately and ethically. Their expertise and tools can provide clarity on questionable claims, protecting companies and policyholders alike from the costs of fraud. With professional support, risk managers can make well-informed decisions on complex claims.?

Conclusion?

You now have a better understanding of common red flags in insurance claims that may indicate questionable activity. Being able to recognize these warning signs is the first step in protecting your company from fraud. Partnering with an experienced investigation firm like Frasco can provide you with the expertise and resources to thoroughly examine claims. By taking a proactive approach, implementing controls, and leveraging outside help when needed, you can reduce your risk exposure and claims costs. While there will always be some claims that merit closer review, arming yourself with knowledge, resources and vigilance will lead to earlier detection and intervention when warranted. With the right systems in place, you can spot problems sooner and take appropriate action to resolve issues before they escalate. Being proactive now will pay dividends through lower risks and reduced losses over time.?