Auto insurance fraud has long been a severe problem for insurers. Coalition Against Insurance Fraud estimated that fraudulent claims cost $309 billion annually — nearly $1,000 for every American family.
As an insurance investigator or claims manager, you know all too well how costly and difficult it can be to unravel suspicious automobile insurance cases involving fraudulent activities such as exaggerated claims, policy misrepresentation, staged accidents, and identity theft. As a result, insurers are constantly on the lookout for fraud indicators. While it's not always possible to know whether a claim is fraudulent, there are some red flags that you should be aware of. Here are 5 of the most common auto insurance fraud indicators.
1. The claimant has a history of filing fraudulent claims
One of the most common fraud indicators is a history of filing fraudulent claims. If someone has filed multiple fraudulent claims in the past, there's a good chance that they're doing it again. Insurers will often run background checks on claimants to see if they have a history of fraud.
2. The claimant is uncooperative
Claimants who are uncooperative or evasive may be trying to hide something. If someone is unwilling to provide information or answer questions, that's usually a sign that something isn't right. Insurers will often investigate claimants who are uncooperative to see if they're trying to commit fraud.
One of the biggest red flags for insurance fraud is when a claimant refuses to give a recorded statement. If the claimant avoids answering questions about the accident on the record, it could be because they're not telling the whole truth or making up a story altogether. Either way, it's worth taking a closer look at the claim.
3. A claimant who makes frequent or large insurance claims
Another indicator of possible fraud is when a claimant has a history of making frequent or large insurance claims. While it's not necessarily suspicious if someone has had to file a couple of claims in the past, it could be cause for concern if they've filed several claims within a short period or if they always seem to be involved in accidents that result in expensive repairs.
4. Accident reports that don't match up with the damage to the vehicles involved
If the damage described in an accident report doesn't match what you see when you inspect the vehicles involved, that's another potential indicator of fraud. Often, claimants will try to exaggerate the extent of the damage to collect more money from the insurance company.
5. Suspicious behavior during the claims process
Finally, keep an eye out for suspicious behavior during the claims process, such as claimants who are unusually combative or uncooperative or seem to be hiding something. These behaviors may not necessarily mean fraud is occurring, but they're worth keeping an eye on.
Auto insurance fraud is a serious problem that costs the industry billions annually. Ads and social media, and online advertisements are excellent sources for investigators to detect potential fraud and untruthful claims. Through Legentic data, you can access billions of historical and real-time data that help you gather evidence and proof on cases you're investigating with little information, such as phone numbers, emails, VINs, text, or even just a FileName.
Find out how Legentic can help you uncover fraud, limit your red flags, and give you access to over 8 billion historical and real-time data.