Watch the full video at https://youtu.be/hPoAHifvCIw  T  The introduction of the damage of bad faith led the insurance industry for several years to be afraid of investigating fraud. Insurers avoided denying claims that they feared the latter would be sued for bad faith. Insurers have discouraged their adjusters from looking too closely at claims. As a result, knowledgeable staff either looked for another career or were fired by companies interested in improving their performance by hiring the less experienced staff.
Investigations of insurance fraud are often expensive. The extent of insurance fraud, depending on which of the various estimates is assumed, varies from $ 80 billion to $ 300 billion dollars each year. The sum is so enormous that it defies understanding. Insurers are discovering that they cannot raise premiums for honest insureds fast enough to cover the amounts lost to fraud. They cannot afford to let such a huge amount of money drain their assets and ruin their profits without a fight.
The first line of defense that stops the bleeding of billions of dollars into fraud is a staff of well-trained and experienced professional adjusters and investigators.
Although many adjusters will never witness the kinds of scams described in this book, they must be trained to admit scams and thus be equipped with sufficient knowledge to distinguish the suspects from the honest claim. States such as California require insurers to train all their claims personnel to recognize insurance fraud, attempted insurance fraud and the indicators or red flags for insurance fraud. The laws and ordinances that try to force the victim of the crime, insurers, to investigate and prepare prosecution for the state, are unfortunately more honored in the crime than in the following. Even when the insurer does the work of preparing an investigation that is sufficient to support prosecution, the local prosecutor refuses to prosecute an insurance fraud case because it requires handling a lot of paper and other investigative materials and the need for expert witnesses. It is much easier to prosecute a violent crime with an injured victim and some witnesses.
Every claimant and SIU investigator should be aware that suspicious claims have the common attributes or red fraud flags. Insurers and their anti-fraud organizations have gathered the common attributes in lists of indicators or red flags of fraud.
Barry Zalma, Esq., CFE
Barry Zalma, Inc.