Is Insurance Fraud Still a Problem?
Insurance fraud continues to be a serious issue in the insurance industry. Estimates from the Federal Bureau of Investigations puts insurance fraud, excluding health insurance, at $40 billion annually. Insurance fraud can fall into a few categories, from individuals committing fraud against policyholders to individuals committing fraud against insurance companies. Insurance fraud can force large costs onto insurance companies and is financially damaging to policyholders. To help fight fraud, insurance companies designate specific personnel to fight this crime, and these individuals are called “special investigators.” These special investigators typically form a unit typically known as a “Special Investigation Unit.” Their purpose is to examine suspicious claims.
Insurance fraud investigation usually involves proving a negative, meaning what has been claimed didn’t happen. Another way of stating this is the burden of proof is on the insurance company to prove what a claimant states is or isn’t true. The success of an investigation relies heavily on the honesty and memory of witnesses and the availability of fact data (e.g., surveillance tapes, cell phone records). The evidence needed for an insurance company to deny a claim because of fraud should be of the same stature that would convince a jury of a crime.
A reason fraud remains an issue is that it’s now organized. In the area of auto accident injuries, the insurance industry is challenged by a system where some participant medical providers and attorneys work together to obtain every dollar available in the insurance policy. Whether or not an injury was sustained is rarely a consideration.
Unfortunately, insurance fraud remains a serious problem that doesn’t show signs of slowing down.