As adjusters know, not every claim is what is seems. Some claims are complex, others rather bizarre and some are just downright creative – you know the kind you get when you thought you had seen everything. And yet, insureds have no shame when it comes to filing claims no sane person would ever consider.
Fraud claims probably require the most ingenuity. According to the Insurance Information Institute, property and casualty fraud costs insurers about $32 billion a year. Costs for healthcare fraud are even more jaw-dropping, ranging from $77 billion to $259 billion a year according to the Department of Health and Human Services.
Fraud can be referred to as either hard or soft. Hard fraud usually involves someone deliberately creating a fake claim or accident. Soft insurance fraud is viewed more as a crime of opportunity – perhaps padding a legitimate claim, changing a home address in order to pay lower insurance rates, or an employer who doesn't list all of the employees so the company pays lower workers' compensation rates. All are illegal, accounting for anywhere from 5 to 20% of insurers' claims costs. The good news is that approximately 95% of insurers are utilizing some sort of antifraud technology, which makes it easier to catch fraudsters.
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