Ask anyone about how they feel about their insurance company and you’ll most likely get a negative response. Perhaps they felt pressured into purchasing a policy or were unhappy with the way their insurer handled a recent claim.
Insurers are often painted as villains, so it’s hard to see them as victims. This is one of the reasons auto insurance fraud is so common. John Standish, an insurance consultant, estimates that at least 25 percent of claims are fraudulent in some aspect, such as an exaggerated injury. How do they get away with it? A former fraudster shares these seven steps to a successful scam:
1) Purchase a policy with med pay coverage – Med pay policies pay claimants for medical bills related to injuries caused by an accident. Typically, policy-holders are supposed to pay this back if a settlement is received, but this rarely occurs.
2) Select an inattentive insurance company – Smaller insurance companies that don’t specialize in automotive policies are particularly vulnerable to fraud since they do not have the staff to properly investigate claims.
3) Choose unlikely suspects – Willing participants with clean driving records, valid driver’s licenses and an insurance policy that’s been active for 6-8 months are unlikely to set off any red flags.
4) Play the part when it comes to medical treatment – Insurance companies easily caught fraudsters when they walked into the clinic, signed in and walked out within minutes. Insurance adjusters are thrown off course when claimants stay in the clinic longer and show up for follow-up visits at regular intervals.
5) Keep the story straight – Write notes on all interactions with doctors, lawyers, participants and insurance companies to keep the story straight. Be mindful of where the notes are kept – many fraudsters have been caught by simply having notes in their
6) Insulate the fraud participants from each other – A successful scam has many players – the claimant, passengers, doctors and lawyers. It’s important that they do not have knowledge outside of their part in the con.
7) Never back down – No matter what evidence the insurance company presents, a successful fraudster never backs down and admits wrongdoing.
Delving in to the mind of an insurance scammer is one step to protecting against fraud. Download the white paper, “An Inside Perspective on Automobile Insurance Fraud” for a detailed account of how insurance companies are duped from a former fraudster.