Auto give ups, stolen vehicles, arson, padded injuries, inflated medical bills, drug diversions, and disability exaggerations are just a few of the scams that play out in the insurance arena daily.

According to the Insurance Research Council (IRC), one in three Americans believes it is acceptable to inflate a claim to pad a deductible. One in four believes it is acceptable to do this in order to recoup previously paid premiums.

The reality is that each and every day insurers are faced with situations that are outright fraud or contain elements of fraud. In fact, it is estimated that 21 to 36 percent of insurance claims contain an element of fraud. The continuing poor economic conditions complicate matters, creating a financial motive for many who would never consider such drastic action in “good times.”

The Bad Apples

So how can insurers, who are charged with accurately resolving claims in a timely manner, discern the good from the bad? How can claims adjusters, often doing more work with fewer resources, take the time to properly identify and investigate claims containing “red flags,” or possible indicators of fraud?

On the surface, this may seem like an insurmountable task. Fortunately, however, there are steps insurers can take to tackle this dilemma. First and foremost, do not go it alone. Gone are the days when we got into our company cars and hit the streets to look for clues to unravel the mystery behind the claim. While this may have been the optimal way to handle claims a generation ago, these investigations can be performed more expeditiously by leveraging available technology, such as link analysis and indexing information.

Of course, it doesn't hurt to have feet on the street either. Having the ability to canvass for witnesses, inspect sometimes non-existent clinics, measure vehicular damage, and take claimant statements in the presence of their attorney can provide invaluable insight into an investigation. When used in conjunction with modern technology, this approach can often make or break a case.

While digging for dirt is imperative, digging deeper is what separates the great adjuster, manager, and executive from the typical. In my experience, I have witnessed the entire spectrum from failure to mediocrity to greatness, and at the latter end, there are common bonds of confidence, determination, and an insatiable curiosity to dig deep and find answers.

Curiosity Fosters Greatness

Great adjusters become great because they ask a lot of questions throughout the claims process. They ask questions not only of parties to a claim but of management. Often it is these very people who become great managers and eventually executives because they ask the difficult questions.

But what exactly sets the great apart from the mediocre? Often it is intuition, such as that of Barton Keyes, a claims investigator in the thriller Double Indemnity. In the movie, Keyes talked of an internal knack or hunch referred to as his “little man.” It was through these hunches that he was able to separate the good claims from the bad every day, and in the movie he solved a murder-for-insurance plot.

A claims professional must follow his or her gut, as it rarely is wrong. If something doesn't seem right with a claim, then it very well may not be. The key is to differentiate between the objective and subjective, which distinguishes between the ordinary and extraordinary.

As discussed in Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary, great adjusters take the time to dig deeper. They will not only ask questions from the parties to the claim, but will also look for discrepancies. They will inquire about the claimant's medical treatment and also obtain physical descriptions of the pertinent clinics and providers.

Great adjusters will ask for directions from the home to the chiropractor's office. They will measure the damages and look for metal striations and paint transfers. The list of what the “great” adjuster will do goes on and on. At the end of the day, this investigative work may show that an ordinary claim was actually staged.

Adjusters will then leverage available technology to search for prior claims and analyze associations between the claimants, medical providers, and attorneys. They will look for key patterns or connections, which in turn can point to larger, more organized activity.

While many organizations are scaling back on manpower for a variety of reasons, it is important to recognize that this increased demand on productivity can take a toll on investigative capacity. By leveraging credible and experienced external business partners, insurers can maintain a competitive advantage. A variety of such partners can provide investigative resources, forensics, accident reconstruction, and demographic information for adjusters to utilize throughout the course of their various claims investigations.

There are also a number of free resources available to computer-savvy adjusters wanting to dig a little deeper on their own. The following is a list of websites that provide a wealth of information that can be used in conjunction with state- and county-specific websites to verify personal information, property ownership, and professional licensure of medical and legal providers:

Skip Tracing Websites and Resources

www.spokeo.com

www.411.com

www.pipl.com

www.anywho.com

Social Networking Sites

www.facebook.com

www.myspace.com

www.linkedincom

www.plaxo.com

Real Property, Asset and Liens

www.earth.google.com

www.salary.com

www.zillow.com

Government Resources

Special Reports /

Red Flags: Digging Deeper in Claims Investigation

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