Insurance Fraud: What You Need To Know Part II

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In the last post, we discussed seller insurance fraud, which is deceit, false statements, or false actions on the part of the insurance agent.  Today, we move on to another form of insurance fraud.  In this case, the insurance company is the victim. 

It might sound odd that people are able to deceive insurance companies that deal with claims day in and day out, but it happens regularly.  In fact, if you think about it carefully, you have likely met someone who has lied to an insurance company in order to collect a larger claim than necessary or to fix a long existing problem after a minor incident.  This is one of the most common forms of buyer insurance fraud, but there are several ways that people can scam the system. 

In many instances, buyers practice this type of insurance fraud because they feel frustrated and desperate when faced with unexpected circumstances.  Nevertheless, they can be harmful for a huge number of St. Petersburg residents.

·         Disabled and Still Having Fun. For those with serious injury or chronic illness, disability payments are important, essential.  Scammers see this form of pay as a free paycheck for the taking, though, and this is when trouble occurs.

·         Faking Medical Records. Before you can get a life insurance policy, you are asked to fill out a medical history form.  In order to get insurance coverage or to get it cheaper, people will lie on the forms, failing to mention known medical complications or a history of tobacco use.

·         Suicide Cover-Up. It is a well known fact that families of suicide victims will not receive life insurance payouts.  In order to prevent this additional headache for loved ones, those committing suicide will attempt to make it appear as an accident occurred.

·         Help Within the Organization. At times, it is not pure buyers’ insurance fraud or sellers’ insurance fraud, but a combination of the two.  In some instances, insurance representatives will help a buyer create fake documents.  This is done after a person passes away or is diagnosed with a fatal illness, but the policies are back-dated to make it appear as if they existed prior to the death or illness.  Today, this is a much more difficult scam to pull off due to the use of technology and superior record keeping.

·         Murder! Certainly, in a case like this, the insurance fraud is the less significant concern, but murder has happened – in numerous cases – because a family member becomes desperate for money and is aware of a life insurance policy.  When the murder is done, the murderer, as the beneficiary, can collect large sums of insurance money.

How does this sort of insurance fraud impact you?  While these buyers aren’t directly attacking you, you will feel the effects of their poor choices.  False claims add up to millions or even billions of dollars each year.  In order to cover those costs, insurance companies have to raise costs for honest Saint Petersburg customers.  Additionally, the insurance companies have to be so vigilant to avoid scams that they go to extremes to ensure a claim is valid.  That can make it very difficult for true victims to get the money they need to pay for damages done or to cover their own loss of wages.

If you find that battling the insurance companies becomes too much to take on alone, then contact a personal injury attorney for assistance.