Category: Scams & Fraud

Insurance fraud is a serious offense that has a ripple effect of repercussions across the entire economy. Some estimates put the annual cost of insurance fraud at $80 billion. When people think of insurance fraud usually it’s the big things that come to mind – staging a car accident, faking an injury, exaggerating an insurance claim, etc. But the truth is many people commit smaller incidences of insurance fraud every day. You may have even done it yourself on accident.

Here are the white lies that can get you in insurance fraud hot water.

Home, Condo and Renters Insurance

• Rounding up the value of items rather than researching the correct estimate.
• Not disclosing something you think may be defective before opening the policy.
• Claiming roommate’s items as your own on renters insurance.
• Failing to mention that you have a home office or conduct business in your home.
• Failing to mention that the home is a rental, not a primary residence.
• Claiming loss on an item that was already damaged or missing.

Motorcycle and Auto Insurance

• Low balling the mileage of a car or motorcycle.
• Low balling the amount of miles you drive in a day.
• Keeping a vehicle registered in an area with lower rates even after you move.
• Overestimating how much a commercial vehicle is used for personal use.
• Overestimating how much is lost in wages due to an injury sustained in an accident.
• Getting excessive treatment, like massage therapy, for a car accident injury.
• Telling the insurer that no one else drives your car when in actuality others do.

Life Insurance

• Lying about your weight. It’s personal information you may fib about to friends, but the life insurance company needs to know the real number.
• Forgetting to mention that you occasionally smoke or did in the past.
• Low balling the amount of drinks you have in a given week.
• Leaving out a prescription drug on the application – even one that’s taken for non-life threatening reasons.
• Not being upfront about your past driving offenses.
• Downplaying your adventure seeking side that regularly takes you to exotic locales and gets you into extreme sports.

Sometimes people unknowingly provide the wrong information. When you’re establishing a policy you may have to guesstimate some information, which may not always end up being accurate. Later down the road if you find that you’ve accidentally provided incorrect information don’t sweat it. Contact your insurer so you can get things updated and on the level.

Whether it’s a little white lie or a big fat one they are all the same, and all of them can be considered insurance fraud. If you don’t tell your insurance company the whole truth it can leave you in a vulnerable position and possibly disqualify you from coverage. When it comes to insurance honesty is always the best policy.

Image Source: amog.com/offbeat/insurance-fraud-costs/

Original Source: http://www.mybiginsurance.com/scams-fraud/white-lies-lead-insurance-fraud

As rampant as insurance fraud is, it would seem that every state has laws laid out to protect businesses and people against such crimes. While some states have made great strides in improving their legal system and cutting down on insurance crime, others have fallen far behind. So far that some don’t even have an established bureau for handling insurance fraud.

States Without Insurance Fraud Bureaus

A state insurance fraud bureau is the agency in charge of handling insurance fraud cases. The bureau carries out a variety of functions including detective work, research, investigations and preventative measures. However, each state has their own guidelines for how their insurance fraud bureau operates and the types of fraud cases they handle.

Currently there are 10 states that do not have an insurance fraud bureau established.

• Illinois
• Indiana
• Maine
• Michigan
• Montana
• Oregon
• Rhode Island
• Vermont
• Wisconsin
• Wyoming

States That Haven’t Acknowledged Insurance Fraud as a Crime

As mentioned above it’s up to the states to decide which types of insurance fraud they actively enforce laws against. Some states like Texas enforce crimes for virtually every type of insurance from health insurance to auto insurance in Texas while a few don’t consider insurance fraud a crime at all.

At the time of this publication two states haven’t defined insurance fraud as a crime: Oregon and Virginia.

Alabama just defined its fraud law in 2012, joining the rest of the states and Washington D.C. Insurance fraud crimes are defined as either: claims fraud, underwriting fraud or insurer fraud. In all but five states insurance fraud is considered a felony.

States With Relaxed Insurance Fraud Reporting

One way that states fight insurance fraud is through proper reporting of expected fraud. Mandatory reporting is required in 42 states. The eight states that don’t require some sort of reporting include:

• Illinois
• Indiana
• Maine
• Mississippi
• New Mexico
• South Dakota
• Vermont
• Wyoming

These are crimes that affect people, businesses and state governments significantly. Every year activist groups like the Coalition Against Insurance Fraud are working with states to push for improvements in how insurance fraud is prosecuted. While great strides have been made in many states, there are some that still have more work ahead to better enforce insurance fraud laws.

Image Source: fraudoffice.com
Original Source: http://www.mybiginsurance.com/scams-fraud/states-without-insurance-fraud-laws

Getting into a collision can be a traumatizing experience, especially if someone gets injured. As serious as these situations are, scam artists around the country aren’t above staging car accidents in order to cheat insurance companies out of money. According to a National Insurance Crime Bureau report released in January 2013 they found that of the 13,000 insurance claims they investigated 34% were actually due to “staged/caused accidents”.

The Costs of Staged Car Accidents

Why would someone purposely cause an accident? Money. Scam artists can reap financial rewards by:

·      Making inflated car damage claims against your insurance company

·      Making inflated car damage claims against their insurance company

·      Faking injuries to receive money from insurance companies

·      Filing lawsuits against the actual victims

In the end the not only does it cost the insurance companies it also costs to guiltless driver. You can kiss your clean driving record good-bye, which will likely lead to higher Texas auto insurance premiums. You’ll also have to deal with handling car repairs, insurance claims and possible legal fees if a lawsuit occurs.

These scams aren’t just fraudulent they are dangerous and sometimes organized by sophisticated crime rings that tempt fate by repeatedly causing accidents. There have been numerous instances where people have been hurt or killed because of a staged car accident. A famous case occurred just a few years ago in Los Angeles when a family of three, including a 2-year old, was killed.

Signs That a Car Accident May Have Been Staged

Scam artists have an arsenal of tricks to cause fender benders that will do significant damage but not put themselves in more risk than what’s necessary. Here are some of the most common types of staged car accidents.

Quick Lane Change and Brake – This is when the scammer quickly changes lanes then once they’re in front of you the slam on the brakes causing a rear end collision. Sometimes scammers will work in unison using two cars, one to swoop in front while another car pulls up beside you making it impossible to change lanes.

Friendly Wave In Then Wreck – The wave in commonly occurs when there are traffic lane merges. They’ll wave you in then as soon as you get close they’ll purposely crashes into you. Of course, they’ll deny that they ever gave you the okay to merge in.

Dual Turn Swideswipe – When there is a dual turn and you are in the inner lane even the slightest drift into the outer lane is reason enough for a scammer to ram into you, blaming you for hitting them.

Intersection T-bone – These staged car accidents typically happen at low traffic intersections. The scammer waits for you to pull through the intersection then floors it, t-boning you in the process. Often “witnesses” show up stating that they saw you run the stop sign or light.

The Classic Brake Slam – The scammer will get in front of you then wait until they see that you’re distracted. Once you are they will slam on their brakes causing a rear end collision.

Are You a Prime Target for a Staged Car Accident?

Scam artists don’t usually pick their victims at random. These criminals look for people that are more likely to have insurance and good insurance at that. People who drive luxury vehicles, new cars, big rigs or work vehicles are prime targets.

Who you are can also make a difference. Scam artists will prey on drivers that they think they are less likely to get in a confrontation with or that they can intimidate. Women and the elderly are often the victim of choice say some investigators.

First Image Source: blog.plymouthrocknj
Second Image Source: wallpaperage.com
Original Source: http://www.mybiginsurance.com/scams-fraud/how-to-spot-a-staged-car-accident