How to Spot Insurance Fraud
For many individuals, having insurance is a valuable investment that can help them get out of a financial burden. Emergencies can happen when we least expect it, so it’s good to have a sense of security especially when it comes to one’s finances. However, since insurance is an industry that handles a lot of money, insurance fraud is a huge problem for legitimate insurance agencies and responsible policyholders.
What is Insurance Fraud?
Insurance fraud is the intentional act of fraudulently obtaining payment from an insurer. Some of the most common insurance frauds include:
- Staged home fires
- Faked deaths
- Stolen cars
- Car accidents and damage
- Health insurance billing fraud
- Unnecessary medical procedures
When an insurance fraud is committed, not only is the insurance agency or business losing money but innocent lives are placed in danger as well. For example, if a scammer is planning to stage a car accident, s/he can collide with any vehicle on the road – possibly causing multiple injuries and deaths. Businesses can also commit workers compensation fraud by misclassifying their workers to save on workers compensation insurance cost.
If insurance fraud continues infecting society, scammed individuals won’t get the coverage they need, and honest businesses have a higher risk paying for increased premiums. One way to put a stop to insurance fraud is to spot it early and report it.
How do I Spot It?
Insurance fraud could be a little tricky to point out. However, by familiarizing yourself with the common insurance fraud techniques, you can avoid being a victim of insurance scams.
Check Claims History
If the person has a history of submitting a lot of claims or has already claimed a lot of losses in a short span of time, then there’s a good chance that it’s a fraud. It’s very fishy if someone has met multiple accidents and damage in a year, especially when the person doesn’t do anything to prevent it.
It’s also good to note that if the person habitually delays the report of a claim or injury, then that person is probably scamming you.
Suspicious Receipts, Bills, and Prescriptions
When you’re shown receipts for the cost of property damage repairs, be vigilant and check the paper first. If the receipt looks suspicious (like a handwritten note), there’s a high possibility that it’s a scam. When it comes to doctor’s prescriptions and medical bills, take note of everything that’s written on the paper. If the doctor wrote unnecessary tests or several medications for a simple injury, it could be a fraud.
Use Old Damage
It’s simple for car accident scammers to bring up old automobile damage in new car accidents. However, old vehicle damage is easily spotted by looking at the size of the dents and dings, as well as analyzing rust and wear patterns.
Presenting Additional Victims after the Accident
Another popular insurance fraud is adding victims that weren’t present in the accident. This scam can be resolved by having the investigators look into the police report and ask eyewitnesses regarding the incident.
By spotting the red flags of insurance fraud early, you’ll spare yourself from being scammed. You’ll also be helping many businesses from losing money and secure the trust of honest policyholders.
If you’re looking for a legitimate insurance company who can help you with your financial burdens in Houston and Cyprus, Texas, contact Low Cost Insurance today. We’re an independent insurance agency, dedicated to providing you with all your coverage needs. Just give us a call at 281-612-7178 and our reliable agents will be happy to help you.
