What every insurer should know about how it can be proactive in its efforts against insurance fraud by refusing to pay all fraudulent claims, by refusing to resolve disputes from fraudsters and by proactively bringing fraudsters to court by claiming damages for common law and fraud withdraw the profit from insurance fraud.
No one knows the true extent of insurance fraud because most attempts at insurance fraud are successful. Estimates are extrapolated from the few people who attempt insurance fraud that are caught.
Insurance fraud is a crime in most states in the United States and in most countries, the common victims of the crime are insurance fraud insurance companies. Some creative people have created fraudulent insurance companies that exist to deceive insurance buyers who obtain insurance from the fraudulent insurance companies.
The crime of insurance fraud is ubiquitous and is committed by every race, gender, national origin, religion or sexual orientation.
Unlike other victims of crime, state legislators require insurers to create special investigative units (SIUs) to carefully investigate all potential insurance frauds and present evidence to the authorities so that they can prosecute insurance fraud. Unfortunately, experience from the insurance industry has shown that even when the insurer’s SIU submits a case to the state’s fraud department or fraud office for prosecution, it is rare that prosecution is initiated and a conviction is reached.
State insurance departments boast of double-digit judgments when they receive as many as 1,500 reports of suspected fraudulent claims every 30 days. Prosecutors disapprove of insurance fraud cases because they are usually heavy documents while assault, rape, murder or drunk driving are usually summarized in a single police report and are therefore relatively easy to prosecute to a jury or get a confession of guilty.
Some insurance companies buy artificial intelligence software to detect insurance fraud. Others employ retired police officers to run SIU and ignore their experienced insurance claims handlers.
Most people do the least necessary to meet the requirements of the anti-fraud regulations and regulations and conclude that it is better to pay the fraudsters than to proactively fight fraud attempts.
All insurers and those who regulate insurers agree that no matter where the insurance is sold, no matter where the promises made by an insurance policy are required to replace an insured person, insurance fraud is a serious problem for the insurance industry. All attempts to deter or defeat insurance fraud to one degree or another.
Everyone realizes that if there is an insurance claim that is denied for fraud, it is crucial that the insured, so accused, will bring an action for breach of contract and for bad faith. Trials in bad faith, even when they fail, take the value of the efforts to deter or defeat insurance fraud, as the defense of the lawsuit in bad faith will usually exceed the amount of the claim that was denied.
On an individual claim basis, it is never cost-effective to reject the claim for fraud. But knowledgeable professionals investigating insurance fraud realize that aggressive action against insurance fraud, refusal to pay a settlement to avoid litigation and forcing the perpetrator to prosecute through litigation and appeal will be known to those who provide insurance through the insurance company. is not a pushover and will avoid fraud attempts against the insurer and move to insurance companies that the fraud perpetrators know will pay rather than fight.