Insurance Claims Fraud

How to Protect Your Business from Insurance Claims Fraud

In a world where insurance is both a form of investment and security, many try to take advantage of the policies and systems that revolve around it. One of the ways that perpetrators try to illegally get money from insurance companies is through insurance claims fraud. Insurance fraud can both be done personally or through online claims. This is why cybersecurity is crucial for many businesses.

What is Insurance Claims Fraud?

By definition, insurance fraud is when a claimant makes up information or exaggerates information in order to get the money guaranteed by their insurance policy. As a result, these false insurance claims can lead to increased rates, taxes, and inflated policy prices for your clients. As there are various types of insurances, there are also various types of devious techniques that scammers do to get money out of these policies. Business owners must be vigilant on how they review insurance claims in order to detect which ones are legitimate or not.

Common Types of Insurance Claims Fraud

Accident Insurance Fraud

Some scammers will try to stage accidents in order to claim a large sum of money from insurance companies. They will claim fake injuries, fake accidents, or stage accidents towards themselves or family members in order to get the claim. Additionally, these types of fraudulent activities can also involve a crime of some type, although it appears on the surface as an accident. At this type of accident frauds, you need to have police authorities involved in the investigation.

Contractor Insurance Fraud

This is the type of fraud that is not usually done by the policyholder but rather by the contractor of a construction business. Some contractors will declare a price of goods and services, which can inflate the price of the home insurance. As a result, this fraudulent activity may cost the policyholder more in his insurance while the contractor takes home the money for their low-quality goods or services. When dealing with this type of fraud, it is important to have regular inspections and investigations of the contractors involved in building the home.

Break-in Insurance Fraud

Another type of fraud that involves home insurance is staged break-ins. At this type of fraud, the homeowner tries to claim that there was a burglar that ruined their property or stole some valuable items. Others would try to commit arson and pretend it was some unknown criminal who set the house on fire. When a homeowner is caught committing these types of fraud, it can lead to criminal charges. Insurance companies must also be vigilant with these types of claims.

Disaster Insurance Fraud

Many insurance companies offer policies that involve house repairs to the provision of monetary resources when a disaster strikes. Although policyholders can be honest, some operators would try to convince or connive with them in order to get a higher insurance claim. They would make false reports about the extent of the disaster, thus scamming the insurance company with the value that needs to be provided.

As you review these strategies, the more that you will discover how you can protect yourself from insurance claims. Protect yourself and your business through an innovative cyber security system. Learn more about our insurance fraud detection and prevention services.

“As online fraud continues to evolve and more insurance policies are generated through online channels, much can be learned about the customer through the devices used to obtain coverage,” said John Cantwell, vice president of auto product development for Verisk Insurance Solutions. “Property/casualty insurance fraud amounts to about $32 billion a year, according to industry estimates from the Insurance Information Institute. As insurance shopping gets easier with more online channels and choices, online criminals have more ways to commit fraud. Adding device-based intelligence to the fraud detection process can help reduce fraud and potentially save insurers millions of dollars.”

Ready for the next step?

In just minutes, we’ll show you how to improve your customer authentication experience, stop fraud and save money.

Fraud Detection & Prevention

Spot user behaviors and device information that’s suspicious, and stop those fraudsters in real time. We track billions of devices and our fraud analysts add evidence to make this intelligence even more effective.

Stop Fraud Cold

Ready for the next step?

In just minutes, we’ll show you how to improve your customer authentication experience, stop fraud and save money.