insurance fraud question

[Arnel_Regina]

So I have insurance now...after reading Shay''s story. But what if someone was in a situation where they lost the ring, didn''t have insurance and then purchased the insurance after the loss.

Or what if someone ''said'' they lost the ring and got the insurance money. How do the big companies find these frauders?

Or what if what if. There are so many possibilities. When I got the insurance it was simple. I just sent in an appraisal but they would have accepted a receipt. What if I had bought a setting that was of cheap quality, making the loss of the center stone likely to happen? I would think insurance companies would want to check on things like that and make you have an inspection every so often or so.

I think that SF or JM requires the inspection but Chubb does not. Is the reason why Chubb''s rates are higher because they account for these fraudulent people? I think the quote I got from Chubb was 2x that of JM. However, the coverage terms with Chubb can''t be beat.

RA

Soon to be married!

 

[Tacori E-ring]

I think any type of insurance is subject to fraud no matter what. That is a risk the insurance companies make but I don''t think any of them are struggling.

 

[wedding_crasher]

Like Tacori said, with insurance there is always a chance of fraud. I would expect that the insurance company takes that into account as well. Maybe they expect X people to commit fraud out of every Y they insure. They would load that into the premium calculation to spread the cost to every insured. So by committing fraud, you are not only hurting the insurance company, you make everybody else pay a little extra too.

 

[Arnel_Regina]

I guess that''s how companies work. I was talking about insurance to some of my coworkers at work. One guy, who came up with all kinds of possibilities on how to make a claim...even more than one claim (take out two insurance policies). He got me thinking about how those people would get caught. This conversation got a little more attention that I had expected.

I actually wouldn''t be surprised if he would be the type of person attempting to make a fraudulent claim. It just doesn''t seem fair that we all pay the price for a few dishonest people in this world...but hey, I guess that''s how it works.

AR

 

[denverappraiser]

What you are asking about is a felony and the insurance companies all have whole departments charged with pursuing the criminals who engage in it. This is a major concern for them and it drives up the costs for us all. It is, of course, not limited to claims about jewelry. Criminals also defraud insurance companies with fictitious health insurance claims, unemployment claims, disability claims, home damage claims, auto claims and probably every other variety of insurance that you can buy. The courts are jammed with this nonsense.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[WinkHPD]

Date: 10/13/2005 1:10:32 PM
Author: Arnel_Regina
One guy, who came up with all kinds of possibilities on how to make a claim...even more than one claim (take out two insurance policies). He got me thinking about how those people would get caught. This conversation got a little more attention that I had expected.

AR

Trust me, they will get caught. I was quoting a replacement for a "gentleman" about fifteen years ago when computers were just coming into their own. I was uncomfortable with the way he was acting and the demands that he was making for a higher quote and I called the adjuster to tell her of my concerns. She listened, we talked and she told me that it was okay, they had just initiated a new system of cross checking claims a short time before and they had him making at least six claims on the same stone, each claim with a different insurance company. She assured me that they were preparing a case against him and that he would be arrested in a few days.

I am sure that in the past fifteen or so years that the systems have become even more interrelated and efficient at catching the crooks. I hope your acquaintence does not try his ideas on for size, he may not like the consequences.

Wink

 

[glitterata]

I wonder about this kind of thing too. I think it''s possible that someone would get away with it the first time, but if they try it again they''ll get caught. Once you make a claim the insurance companies look at future claims much more carefully, don''t they?

The sort of person who would cheat once is likely to cheat more than once, which makes them likely to get caught.

Or maybe that''s just wishful thinking on my part. I hate to hear about people who do wrong and get away with it. Makes me feel ashamed to be human.

 

[strmrdr]

most crooked people are stupid people who think they are smart.
They mess up and get caught.
double claims will get caught right away.
All insurance claims by almost all insurance companies go into a database.
Its simular to a credit report except there are few rules about how long they can keep the data.
They have some very very smart people looking for patterns and checking things over. They will spend $100k going after someone on a $10k loss if they have too.

 

[Shay37]

It''s not only sad that people think they can get away with things like this, but it''s also sad that it makes it more difficult for other people who have legitimate claims to be taken care of when they happen. I am grateful that you got the insurance though. I never figured that I would need it. I certainly didn''t think that I would have a loss due to theft. I just didn''t take into account my own clutziness or stupidity. Unfortunately, a much more likely scenario than getting mugged or stolen from is damage or loss due to gross stupidity.

Shay

 

[claimsjeff]

Yes, fraud is an element in any type of insurance exposure(auto, health, life, and jewelry insurance). As an insurer we have an obligation to our policyholders to aggressively pursue fraud.

Why do people commit fraud.....they need money? As a replacement policy we see some fraud but not to the extent of a cash policy since it creates an extra hurdle for the person committing fraud to get the money. Insurance companies losses and expenses are the drivers to their insurance rates. It has been estimated that over 25% of all insurance claims nationwide have some element of fraud(staged losses, lying on applications, padding the damages, etc....)

We will accept annonymous tips from anyone on jewelry fraud cases regardless if we insure them, and make sure that they get to the appropriate fraud bureaus at the department of insurance to investigate.

Thanks,
Jeff A. Mills
Vice President Claims
Jewelers Mutual Insurance Company

 

[lumpkin]

Well, I have a question. Many years ago I lost a pin passed down from my great aunt. It was not insured, and I was heartsick. A few years later, thankfully, it turned up in a scarf. Apparently I had taken off the scarf and put it away, never to wear it again and the pin was attached to it. I often wondered what would happen if you lost something, turned in a claim, then years later found the item? How would an honest person handle that? I think I''d almost be afraid to tell the insurance company because they might prosecute you even though no intentional fraud was committed? I''m sure there have been women who have lost an engagement ring, turned in a claim, and found it later. What happens in those cases?

Just curious....

 

[glitterata]

You''re obliged to tell them if the item turns up, otherwise it IS fraud. I think they own the item if you''ve collected the insurance money for it, though I could be wrong about that. I don''t know whether you''re obliged to give back the money or hand over the item, but I''m sure it''s at least one of the two. Would you have to pay interest if you''ve had the money for a while? I hope someone knowledgeable will chime in.

 

[Arnel_Regina]

Hi,

When getting my insurance I asked all sorts of questions and that one came up. You have to return the claim (meaning the money). Sounds fair...Of course, how would they know you have it? Sticky situation huh? Honestly, I don''t know how one could NOT say anything. I would be filled with so much guilt. But that''s just me.

And thanks everyone with your input with this thread. My coworker is definitely not a friend of mine. Those kinda people make me sick. Too bad I can''t choose who I work with. Life would be much easier.

RA

 

[RockDoc]

RE; Fraudulent Claims....

Insurance companies either have or hire experts to help substanciate fraud, if they feel it actually exists.

The larger companies have ways of undercovering those who commit these sort of crimes.

Neil certainly addressed this well. And Storm''s opiinion of stupid people doing stupid things is certainly right on.

I know of a claim for a "lost" diamond, where the client had the diamond removed. The prongs had tell tale marks that were made with a prong lifter, which prooved that fraud entered into this claim.

People that get "cute" with this sort of stuff don''t realize the mistakes they make that very often are uncovered, even where there is no record of previous claims.

There is a huge database the insurance companies have to check out someone''s claim history.

I know that I worked with an insurance company and the adjuster was determined that there was fraud, and couldn''t prove it, but I was told, that the claimant, if it was fraudulent, was going to have two of the item and not get paid by "caxhing out".

As far as retirning an item you previously made a claim for.... and later it is found or recovered, it is very wise to inform the insurance company about it. If cash was paid out, and the item not replaced I believe most insurance companies would agree to a reasonable method of reimbursing them. In the event that they replaced them item, you''d probably have a choice of which one you wanted to return.

Rockdoc

 

[lumpkin]

Date: 10/18/2005 11:57:00 PM
Author: RockDoc
RE; Fraudulent Claims....

...As far as retirning an item you previously made a claim for.... and later it is found or recovered, it is very wise to inform the insurance company about it. If cash was paid out, and the item not replaced I believe most insurance companies would agree to a reasonable method of reimbursing them. In the event that they replaced them item, you''d probably have a choice of which one you wanted to return.

Rockdoc

Thank you for answering my question. That makes perfect sense -- just turn in the one you thought you lost, or the new one, or pay for it. Thankfully, I''ve never lost anything valuable enough to have insured. Hopefully I never will.

 

[claimsjeff]

Sorry I stepped away from this thread...out working on hurricane claims and now watching Wilma.

Yes policyholders have an obligation pursuant to their policy(contract) to notify the insurer when there is a recovery of salvage. We see this routinely and we appreciate the honesty of the policyholder stepping forward.

In regard to fraud, insurers use "red flags" to identify suspicous claims. Each company has an outline what these are. Depending on the level of suspicion it is then referred to the SIU (special investigation unit) that insurers either have on staff or contract with. Each state has their own Fraud Unit established by the Department of Insurance. Thus, the insurers SIU work in coordination with the state investigators. We like other insurers use the centralized database mentioned above to see if there is a frequency of losses or the same loss reported to another insurer. Just because someone has had several claims does not mean a claim is fraudulent but could be considered a red flag. Some people just have "bad luck" or have higher exposures to loss then others.

Insurance fraud in all 50 states is considered a felony. There is no statute of limitations on the criminal prosecution of insurance fraud, though there are statutes on civil recovery.

Thanks
Jeff A. Mills
Vice President Claims
Jewelers Mutual Insurance Co.