Insurance fraud is an inescapable and significant element of any insurance program. One current estimate of the annual amount of insurance fraud just in the state of California is 1.7 billion dollars. This translates to an average cost of more than $200 per year for every policyholder in California. It is estimated that one-third of all insurance claims in California include some element of fraud. The experience is similar in other states.
Despite the vast scope of this problem, the majority of fraudulent cases are generated by a relatively small percentage of the population. Through intelligent and thorough investigations, it becomes much easier to detect fraudulent claims and bring them under control. We thought it would be of some assistance to share a few tips with you from our 25 years of experience in doing field investigations. Here are what we think are the twelve most useful tips. INVESTIGATIVE TIP #1 A vital step to getting consistent results from activities checks, a step that by experience leads to results in 9 out of 10 cases, is proper homework done before going into the field. Before leaving the office, it pays to run several simple computer checks. These will verify the applicant's address, give a basic physical description, and on occasion will give you his current place of employment - a real money saver. A telephone call to the former employer for a full description, vehicles driven, habits and information on the applicant's lifestyle and hobbies can result in a wealth of information that is vital at the time of conducting your investigation in the field. The combination of these actions will give you a good picture of the subject prior to spending time and money in the field trying to develop this information the hard way. As one recent example, by doing such homework we were able to locate the applicant's current place of employment, a local service station. This allowed us to go right into a subrosa investigation, and film was rapidly obtained of the applicant climbing under cars and pushing them across the station yard, all with a crippling "low back injury" from his previous employer. INVESTIGATIVE TIP #2 When a claims professional is interested in checking up on the activities of an applicant but does not want to go to the expense of surveillance, he or she should make sure to use an investigator who always carries a camera on his activities checks. There is no extra expense involved in having a camera handy while conducting a neighborhood activities check. The camera is there in case the investigator happens to catch the applicant in the act of strenuous physical activity. Besides documenting the investigation file, this can lead to valuable evidence of the true physical condition of the applicant. In one recent case, our investigator was doing a neighborhood activities check when he noticed the applicant fertilizing the front lawn of his residence. With a camera to hand, of the applicant was documented hauling around 80-pound bags of steer manure, and engaging in repeated bending and lifting over a period of several hours. |
In another case we recently handled, the applicant was a woman with a back injury on permanent disability. While conducting an activities check our investigator spotted the applicant using a shovel to dig a flower garden at her residence and documented the activity, which involved continuous bending at the waist. These are the kind of results one can expect from an alert investigator on an activities check who has a camera handy and ready to use. INVESTIGATIVE TIP #3 A background investigation can sometimes be used in conjunction with an activities check, subrosa investigation, or AOE/COE investigation to help effectively resolve the claim. The proper use of background investigations can help locate and document prior injuries, multiple claims, criminal histories, and non-industrial stress factors such as marital or financial problems. In the course of routine investigation an experienced Investigator may notice indications of improper activity on the part of an applicant, and he should then proceed to obtain authorization and conduct appropriate background checks. These often lead to documentation that can be used by examiners and attorneys to successfully defend or otherwise resolve the claim. For example, in one particular case the applicant was claiming a low back injury and we were assigned to do an activities check. Information we uncovered prompted our investigator to run the applicant's Department of Motor Vehicle history. This turned up an auto accident that occurred three weeks after the alleged date of injury. We found the applicant had filed an insurance claim against the other party in the auto accident, alleging a low back injury identical to the one we were handling. The applicant had received medical treatment in connection with this auto claim, and the medical records of this treatment stated that he was in perfect health prior to the auto accident. These documents led to a successful resolution of this claim in court. This is just one example of the value of conducting a background investigation when the facts call for one. Stay tuned for next month's installment of The 12 Most Useful Investigative Tips. . |
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FRAUD CHRONICLES – Tales from the Front Lines Insurance fraud is a significant factor in insurance costs. Estimates of insurance premium devoted to paying fraudulent claims range from 5% to 30% and any of these percentages translate into billions of dollars lost. The front line in the fight against many types of insurance fraud is the field investigator, armed with digital camcorder and telescopic lens. Here is where the truth as to physical condition and claimed disability can be found. To obtain
a copy of Fraud Chronicles: Tales from the Front Lines, please
go to the following URL: http://www.dmainvest.com/fraudchronicles |
For the full article, click here. |
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For the full article, click here.
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