Fudging the details of an insurance claim report – perhaps exaggerating the extent of damage, or not being entirely truthful about how exactly an accident happened – is a harmless lie, told by many people. Right? Wrong. Insurance fraud, or trying to get benefits that you aren’t entitled to from an insurance company, can be a misdemeanor or a felony crime. This offense can carry heavy fines or even prison time. At Radius Investigations, we carry out a variety of services for insurance fraud investigations to help prevent or limit the losses sustained by fraud.
Types of Fraud: Hard vs Soft
Insurance companies generally identify two kinds of fraud: hard and soft. Soft fraud is more common and involves adding an element of untruth to an insurance claim. Hard fraud is falsifying a claim altogether and is slightly easier to detect. Both qualify legally as insurance fraud and can be a serious problem. It is estimated that insurance fraud costs the average American between $400 and $700 yearly, as companies have to recoup their losses from false or exaggerated claims.
How Do Companies Handle Insurance Fraud Investigations?
Typically, most companies hire a private investigation company offering insurance fraud investigations or they use their own special investigations department. Larger companies might have fraud detection software already in place to weed out what claims need to be investigated more in-depth by a human investigator.
Once one or more red flags on a claim are identified, old-fashioned detective work takes over. In the past, humans would have to carry out insurance fraud investigations, but in this era of social media, many claimants do a lot of the work themselves. For example, someone who has filed a worker’s comp claim but then posts a picture of themselves on Facebook, Instagram, or Twitter finishing a fun run probably isn’t as hurt as they said they were. In this manner, a lot of the legwork involved in insurance fraud investigations has been reduced in the modern age. However, a lot of work for human investigators is still involved, particularly in more complicated cases.
What Do Companies Do When Fraud is Spotted?
Once the investigation has been wrapped up and it has been determined by a private investigation firm, a company’s own SIU, or local law enforcement that fraud has been committed, the insurance company can then choose to press charges against the claimant, or simply settle out of court, which often involves discontinuing or not granting benefits and dropping that claimant’s policy. Either way, consumers should take care when filing insurance claims and not commit fraud, as it is a serious a crime that can affect your ability to get an insurance policy again, or even result in the loss of your freedom for felony insurance fraud.
Why Hire a Private Investigation Firm?
If your company is struggling with losses to fraud, it may be worth hiring a private investigation company such as Radius Investigations. While we do offer a variety of investigation services, we specialize in helping businesses fight fraud. Give us a call today, and see what Radius Investigations can do for you.
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