ICC'S
NATIONWIDE FRAUD
INVESTIGATION
MORAL AND MORALE HAZARDS
FRAUD INDICATORS
COMMERCIAL PROPERTY LOSS - FIRE,
THEFT
INDIVIDUAL PROPERTY LOSS
PERSONAL INJURY
AUTOMOBILE
ACCIDENTS
WORKERS' COMPENSATION CLAIMS
INSURANCE BAD FAITH INDICATORS
There is no doubt that fraud is costing companies,
businesses, and individuals to pay, continually, higher insurance premiums.
Insurance provides many benefits to our society. However,
these benefits ARE NOT COST-FREE. Premiums, for the insured, are charged in order to collect the necessary
money to pay the losses of the insured.
The fraud and abuse occurs from moral and morale hazards.
MORAL AND MORALE HAZARDS
To some extent, the existence of insurance coverage
encourages losses.
Even though insurers have an economic incentive to
encourage loss control, insurance sometimes provides an economic incentive for insured's
to have losses.
Moral Hazard
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Moral hazard is a condition that exists when a person may
intentionally try to cause a loss or may exaggerate a loss that has occurred. Nobody knows
for sure how many car or building fires are started intentionally by people who would
rather have the insurance money than the car or building.
More common are exaggerated or inflated claims. An
insured may claim that four times were lost rather than the actual three or that the items
were worth more than their actual value. In liability situations, third-party claimants
often exaggerate their personal injuries and property damage, and sympathetic physicians,
lawyers, auto body shops, and contractors may support these exaggerations and drive up the
cost of claims.
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Morale Hazard
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Morale hazard is a condition that exists when a person is
less careful because of the existence of insurance.
Morale hazard does not involved an intent to cause or
exaggerate a loss. Instead, the insured becomes careless about potential losses because
insurance is available. Leaving the keys in an unlocked car or allowing fire hazards to
remain uncorrected are examples of morale hazard.
Moral hazard results in additional losses that drive up
the costs of insurance because of injuries and damage that could have been prevented.
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FRAUD INDICATORS
The following are some of the indicators ICC
considers in their investigation of potential insurance claims:
GENERAL
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Recent increase in coverage.
Loss occurred shortly after inception date of policy or
shortly before expiration of
policy period.
Insured verifies existence and extent of coverage
shortly before loss.
Undisclosed duplicate coverage.
Insured willing to settle for substantially less than the
purported value of the claim in order to speed
claims settlement process or to avoid documentation of claim.
Over-familiarity
with claims process.
Extensive history of similar
claims, particularly claims not disclosed by insured.
Unwillingness by insured to respond to questions concerning
the loss or injury or to provide
documentation of same.
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Commercial Property
Loss - fire, theft
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Any indication that the business is having
financial difficulties or has immediate need for funds.
Deteriorated or outmoded facilities,
business is in bad location or deteriorating neighborhood.
Machinery, production equipment or
inventory is obsolete or unmarketable. Property is over-insured.
Unusual presence of combustible
material on the premises.
Unusual handling of combustible
materials normally present on the premises.
Presence of multiple fires,
accelerants.
Evidence that valuable property was
recently removed from the premises or relocated to a safer place within the
premises.
Any departure from long-standing
routine (failure to activate alarm system; shut-down of sprinkler system;
discharge of security guard)
No evidence of unlawful entry or evidence of
unlawful entry appears to have been manufactured.
Real property is heavily mortgaged.
Business personal property secures
multiple and substantial debts.
Recent history of late payments or
default on loans.
Principals in business have history
of business failures.
Recent expansion of business
facilities which caused insured to incur substantial debt; other
over-extension.
Radically differing accounts of
accident or manner in which loss occurred, including inconsistent reports
from the same person.
Overlapping ownership of related
businesses with inventory moving readily between businesses without adequate
documentation.
Poor economic climate for particular
business
Damaged property discarded or not
readily available for inspection.
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INDIVIDUAL
PROPERTY
LOSS \
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Insured experiencing marital
difficulties, including separation, divorce, substantial child
Support
obligation or recent increase in child support obligation.
History of transiency
when ownership of property lost is inconsistent with transient lifestyle.
History of gambling or
alcohol or drug abuse.
Insured has spotty work
history or extended period of unemployment.
Poor economic climate
for insured's profession or trade.
Property lost or
destroyed was being advertised for sale.
Loss limited to high
ticket or scheduled items.
Insured's lifestyle is
inconsistent with income.
Value of property lost
is inconsistent with insured's income.
Too many receipts to
support claim ~e.g. insured produces receipt for socks purchased 6 months
prior to loss).
Too few receipts,
especially for recently purchased, high ticket items still under warranty.
Receipts are suspicious
in nature (no store identification on receipt, consecutively numbered
receipts, large number of undated receipts).
Recent movement of
valuable or sentimental property to place of safety.
Unexplained absence of
typical household items or non-combustible items at fire scene.
Unexplained absence of
family pet at time fire or illegal entry occurred.
No evidence of unlawful
entry or evidence of unlawful entry which appears to have been manufactured.
Pattern of past claims
or losses.
Property heavily
mortgaged or insured otherwise financially overextended.
Insured's' movements
unaccounted for at time of loss.
Unexplained departure
from habits.
Radically differing
accounts of accident or manner in which Loss occurred, especially
inconsistent reports from the same person.
Damaged property
discarded or not readily available for inspection.
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PERSONAL
INJURY
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Insured/claimant has extensive
history of claims/accidents.
Descriptions of
occurrence vary widely or are virtually identical suggesting rehearsal.
Legal representation
sought shortly after injury occurred.
No treatment sought for
injuries until a substantial period of time elapsed after the accident or
until legal representation is obtained.
Course of treatment is
questionable (no apparent relationship between injuries claimed and
treatment provided; minor injuries result in major medical costs; medical
bills are out of balance with treatment obtained).
Documentation of
treatment is suspect (photocopies of bills supplied; no record of dates of
treatment; no itemization of treatment provided)
Majority of complaints
are subjective and incapable of corroboration.
Claim for pain and
suffering is not consistent with severity of injuries.
Long-standing
relationship between attorney and treating physician.
In products cases,
injury-producing product has been lost or destroyed.
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SPECIAL CONSIDERATIONS
APPLICABLE TO AUTOMOBILE ACCIDENTS
Damage to vehicle is
inconsistent with injuries claimed.
Absence of police report
where logic dictates that a report should have been made.
Existence of multiple
claimants as a result of same accident whose injuries vary widely in degree.
Multiple, unrelated occupants of same vehicle.
Relationship among occupants creates possibility of collusion.
Multiple claimants obtain representation from same attorney.
Multiple claimants obtain treatment from same physician and
follow similar course of treatment.
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SPECIAL
CONSIDERATIONS APPLICABLE TO WORKERS' COMPENSATION
CLAIMS
Unwitnessed Monday morning accident.
Claimant can seldom be reached by phone during the day.
Claimant repeatedly misses or reschedules doctor's
appointments
Nature and extent of alleged injuries are inconsistent with
how the accident occurred and/or doctor's diagnosis.
The claimant's co-worker has a prior history of workers'
compensation or liability claims.
The claimant is self-employed or has a job that would allow
the claimant to work for cash while collecting temporary disability.
The claimant's employer is experiencing financial or labor
difficulties.
Claimant's job performance is poor and/or claimant has taken
significant sick time for unexplained illness.
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There have been  requests for this page
world-wide. |
ICC only
investigates the facts thoroughly and presents the findings in a detailed report.
ICC services
are NATIONWIDE!
ICC consultants have professional insurance
backgrounds in fraud and have saved many major insurance companies millions of dollars in
investigating insurance fraud.
ICC has also, helped insurance companies as
"Third Party Interveners" in the payment of claims promptly, without undue
delay, by being able to rule out suspicious or vague insurance claims that are presented
to the company.
Insurance Bad
Faith Indicators
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1) Misrepresenting pertinent facts of insurance policy provisions relating to
Insurance Claims Consultants- A Company that helps you settle your claim
coverage at issue.
2) Failing to acknowledge and act reasonably and promptly upon communications with
respect to claims arising out of insurance policies.
3) Failing to adopt and implement reasonable standards for the
prompt investigation of claims arising under insurance policies.
4) Refusing to pay claims without conducting a reasonable investigation based upon
all available information.
5) Failing to confirm or deny coverage of claims within a reasonable time after
proof of loss statement has been completed.
6) Not attempting in good faith to effectuate fair and equitable settlements of
claims in which liability has become reasonably clear.
7) Compelling insured to institute litigation to recover amounts due under an
insurance policy by offering substantially less than the amount ultimately recovered in
actions brought by such insureds.
8) Attempting to settle a claim for less than the amount to which a reasonable man
would have believed he was entitled by reference to written or printed advertising
material accompanying or made part of an application.
9) Attempting to settle claims on the basis of an application which was altered
without notice to, or knowledge or consent of the insured.
10) Making claims payments to insured or beneficiaries not accompanied by a statement
setting forth the coverage under which the payments are being made;
11) Making known to insureds. or claimants a policy of appealing from arbitration awards
in favor of insureds or claimants for the purpose of compelling them to accept settlements
or compromises less than the amount awarded in arbitration.
12) Delaying the investigation or payment of claims by requiring an insured, claimant, or
the physician of either to submit a preliminary claim report and then requiring the
subsequent submission of formal proof of loss forms, both of which submissions contain
substantially the same information.
13) Failing to promptly settle claims where liability has become reasonably clear under
one portion of the insurance policy coverage in order to influence settlements under other
portions of the insurance policy coverage.
14) Failing to promptly provide a reasonable explanation of the basis in the insurance
policy in relation to the facts or applicable law for denial of a claim or for the offer
of a compromise settlement.
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