Fake Claims
The term "fake claims" refers to insurance claims that are made fraudulently. shortly before submitting a claim A fire-damage claim for a home or auto where the fire started immediately after a family argument, or shortly after family members left the home/car Medical claims submitted by a temporary employee, whose job is ending In order to more easily identify instances of fake claims, many insurers employ Special Investigation Units, or SIUs, which consist of employees, who have backgrounds as detectives, police officers, and in other similar professions. Insurance companies keep in-depth records on claims and do all sorts of analyses to sniff out fake claims–everything from figuring out who is most likely to file a claim to when and where. Fake claims are often exaggerations of valid claims to an insurance policy, which results in a larger claim settlement. In order to more easily identify instances of fake claims, many insurers also employ Special Investigation Units with employees who have backgrounds as detectives, police officers, and in other similar professions.
What Are Fake Claims?
The term "fake claims" refers to insurance claims that are made fraudulently. These claims are made in an attempt for the policyholder to benefit financially from making claims that are false or exaggerated. While such practices are a fairly common occurrence, they are highly illegal.
Understanding Fake Claims
Fake claims are often exaggerations of valid claims to an insurance policy. For example, a homeowner insurance policyholder may have been the victim of breaking and entering where items were stolen. The number (and value) of the stolen items may be exaggerated on the claim report, indicating that more items were stolen than really were. This exaggeration could lead to the homeowner receiving a larger claim settlement than they are truly entitled to. Large claims are often investigated to mitigate such problems.
How Insurance Companies Discover Fake Claims
Insurers try to find any patterns in the frequency and type of past claims. Insurance companies keep in-depth records on claims and do all sorts of analyses to interpret the data they contain – everything from figuring out who is most likely to file a claim to when and where. If a claim doesn't match the typical pattern, they'll notice. In addition, there are a number of indicators that insurance agents look for to identify possible instances of fake claims. They include:
Special Investigation Units
In order to more easily identify instances of fake claims, many insurers employ Special Investigation Units, or SIUs, which consist of employees, who have backgrounds as detectives, police officers, and in other similar professions. They can perform a wide array of tests and checks to identify anyone trying to commit fraud. Here are a few things they can do:
Related terms:
Liability Car Insurance
Liability car insurance provides financial protection for drivers who harm someone else or their property while operating a vehicle. read more
Claims Adjuster
A claims adjuster investigates insurance claims to determine the extent of the insurance company's liability. read more
Contractor Fraud
Contractor fraud refers to illegal business practices committed by individual contractors or firms hired to renovate, repair or (re)build residential properties. read more
Independent Insurance Adjuster
Independent insurance adjusters work for the insurance company but through a third party that specialized in homeowners or other types of insurance claims. read more
Insurance Fraud
Insurance fraud is the execution of illicit schemes to falsely reap the monetary benefits of an insurance policy. read more
Personal Lines Insurance
Personal lines insurance includes property and casualty insurance products that protect individuals from losses they couldn’t cover on their own. read more