Insurance fraud is bigger than ever, and scammers are coming upwith new wrinkles all the time. As the guys on the front lines,insurance agents are in a unique position to spot insurance fraudas it's happening and play a powerful role in stopping it before itstarts.

Conservative guesses put the cost of fraud across all lines at$80 billion a year, said Jim Quiggle of the Coalition Against Insurance Fraud(CAIF). The Aite Group estimates it at about $70 billion forproperty-casualty fraud alone, with 10 percent of every claimsdollar goes to fraud.

And instances of fraud are on the rise: The National Insurance Crime Bureau(NICB) conducts numerous studies on insurance fraud and reportsa 27 percent increase in the submission of questionable claims byNICB member insurance companies since 2010.

Here are the types of fraud experts say are most prevalenttoday:

Claims padding: “Lost wedding rings, inflated homeentertainment systems after burglaries or house fires—these kindsof claims are a perennial drain on insurers,” Quiggle said.

Staged auto crashes: A long-standing, well establishedand sophisticated crime niche, dominated by ethnic groups(Russians, Armenians, Estonians), especially in heavily populatedurban areas in states with mandatory personal injury protectioninsurance like Florida, Massachusetts, New York and New Jersey.Crooks take out policies on people who then stage accidents tocollect medical benefits under the state's no-fault provisions,Walsh said. A largely Russian-run ring in New York made at least$400 million in bogus injury claims, Quiggle said.

Read related: “ConvictedPIP Fraud Ring Leader Faces 75 Years in Jail .”

Contractor fraud: Whenever naturaldisasters strike, contractor scams are close behind; and eventslike last year's Superstorm Sandy are like ringing the dinner bellfor crooks. The problem has grown so acute that more states arepassing laws cracking down on dishonest contractors.

Read related: “OneYear After Sandy, New Jersey Regulator Warns of InsuranceFraud.”

Workers' comp fraud: Strapped business owners reluctantto part with cash for workers' comp premium are hiding workers inshell companies or labeling them independent contractors,especially in the construction industry, Quiggle said. Networks ofcheck-cashing firms help launder the money.

Read related: “Fla.,N.Y. Workers' Comp Reforms Working, But Officials Say More Needs toBe Done.”

Arson: Economic hard times always make auto, home orbusiness arson more popular. Nearly two-thirds of state fraudbureaus reported increased home arson cases in 2010.

Healthcare reform scams: The large market of uninsuredAmericans are ripe for the pickings here, as bogus healthcare plansgrow. Most state fraud bureaus have reported a spike in fake healthplans, with nearly 40 percent saying their caseload was muchhigher, according to CAIF.

Ghost brokering: The growth in online and directinsurance has created a lucrative market for an emerging trendknown as “ghost broking,” said James Ruotolo, principal at SAS, abusiness analytics software firm. Ghost brokers offer significantlycheaper insurance rates than legitimate insurance agents byfalsifying key details in the application to ensure that theinsured pays lower premiums. Ghost brokers are often unlicensed andthe policies they obtain for their customers/victims may beinvalidated because of the fraudulent way in which they wereobtained. Although the practice is prevalent in the United Kingdom,more cases are emerging in the U.S., CAIF's Quiggle said.

Read related: “WhoYou Gonna Call?: Insurers Aim to Bust Ghost-BrokeringPractice.”

Agents are in a unique position to spot insurance fraud beforeit happens because they are sometimes dealing face-to-face with thewould-be perpetrators. Fraud experts—and insurance agents who havepersonally faced down fraud–provided this checklist for agents touse in preventing the most prevalent forms of insurance fraud:

Auto fraud:

• No record of prior coverage
• Vehicle garaging address does not match mailing address ordriver's license address
• The policy took effect just before the loss
• The policy expires soon
• Policyholder frequently wants to add or remove vehicles and/ordrivers from their policy
• Policyholder asks you to back-date coverage such as towing orrental
• More vehicles than drivers listed on the policy
• The client sharply increased the policy before the loss
• The client has personal or financial problems
• The crash happened shortly after the policy was taken out orthe vehicle was registered.

Commercial fraud:

• Claimant is ill or nearing retirement age
• Finances are in arrears, such as taxes, payroll and loans
• Inventory is obsolete or overstated
• Claimant sharply increased policy just before loss
• Policy seems to overvalue property
• Claimed loss is not directly related to business.

Personal property loss (home arson,“stolen” possessions):

• Claimant sharply increased policy before loss
• Client has significant debt or faces foreclosure
• Insured property such as jewelry or home music system seems farmore expensive than client's income
• Policyholder asks you to backdate coverage such as watercoverage endorsement
• Building or contents were for sale at the time of loss
• Property is in disrepair, condemned or to be demolished
• Several items were recently added to the policy just before theloss.

General red flags:

• Applicant is unsolicited, walk-in business not referred by anexisting policyholder
• Applicant states they will soon be moving to insuring state andwants to establish coverage before moving there
• The applicant needs insurance immediately, and “doesn't havetime” to provide detailed answers to standard questions
• Applicant neither works nor resides near the agency
• Applicant wants to or already paid premium in cash or byanother non-traceable method (cashier's check, money order)
• Applicant's address is in a high-rise apartment complex, but noapartment number is listed
• Applicant initially quotes a commercial policy, then later buysa personal lines policy for the same vehicle
• Personal lines policy paid for with routing number/accountnumber of a corporate bank account (and vice versa)
• Applicant requests all correspondence to be sent to anout-of-state address
• Applicant cannot produce current identification and/or driver'slicense, or has a temporary, recently issued, or out-of-statedriver's license/state identification card
• Applicant is unusually familiar with insurance terms orprocedures such as medical terminology, workers' compensationclaims handling procedures and laws, vehicle repair terminology,coverage and special limits
• If you suspect someone is gaming the system or intentionallytrying to obtain benefits to which they are not entitled, contactthe insurance companies' special investigation unit or the NationalInsurance Crime Bureau hotline at 1-800-TEL-NICB.