Why insurance companies need insurance investigators

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Both individuals and companies benefit from the safeguards that are insurance policies. An insurance policy help protect against loss be it from accidents or other life-changing events, depending on the policy. The right insurance policy can help a company protect itself, its assets as well as their employees, while individuals can protect themselves against accidents, loss of income, or to protect their loved ones in case of death.

Unfortunately, there are people who seek to take advantage of this social safeguard for their own financial gain. Insurance fraud is a common and costly issue, with nearly $80 billion lost annually. Insurance fraud affects both the insurance company as well as the other policy holders with that company. With such high losses, insurance investigators are crucial assets for any insurance company to have. These investigators’ task is to use their skills and experience to confirm or deny whether a claim is fraudulent. Their work allows insurance companies to identify insurance fraud and either deny payment to the criminal party or at the very least minimize the amount they need to pay.

There are several common types of insurance fraud that often require the expertise of an insurance investigator.

 

1. Car Insurance

This is perhaps the most prevalent form of insurance fraud and is most often committed in one of three ways. The first two ways are similar in that criminals attempt to commit fraud against another person’s insurance company. This is done either by staging a collision accident or getting run over on purpose, after which they make a claim against the other driver’s insurance.

When this happens, both the policy holder and the insurance company are affected; the company due to the payout for the fraudulent claim and the holder due to an increased premium. The third most common type of insurance fraud  happens when the criminal party falsely reports their own car stolen in an attempt to collect the insurance from the company with which they have a policy. 

2. Workers’ Compensation Insurance

This type of insurance fraud happens when a worker protected by their workplace’s insurance policy places a fraudulent claim, either by falsely reporting the severity of injury that occurred in the workplace, claiming that the injury occurred while working, or by claiming for a non-existent injury. In fact, some of these claims have been disproved because the ‘injured’ worker was found engaging in strenuous activities while they were supposedly immobilized by the workplace injury.

 

3.  Health Insurance

Health insurance fraud most commonly occurs when a policy holder makes a claim against their insurance for medical procedures and services that are unnecessary or not covered by their policy. Another common instance is a claim for a larger amount than their medical services cost.

The Need for Insurance Investigators

In cases of insurance fraud it is the insurance company’s obligation to make sure the fraud is detected and prevented from occurring. By doing this, the company protects themselves and their business while at the same time protecting their other policy holders. Insurance companies do not personally know their claimants and it’s not too difficult for criminals to manufacture false papers that support their claims. When someone makes a claim that raises a red flag for the company, it’s up to them to determine the veracity of the claimant. This is when the company turns to an insurance investigator.

Insurance investigators hired by the company search for the facts and gather evidence that will either prove or disprove the suspicious claim. This is done through conducting interview, reviewing relevant documents and in some cases even placing the claimant under surveillance. If the evidence they’ve gathered points to a false claim, it can them be used in a court trial against the individual committing the fraud. If they discover that the claim is valid, the company will pay the claimant satisfied that they have done their duty in protecting their policy holders. Hiring an insurance investigator is an expense for the company, but it’s better to spend some money on an investigator than to lose a large sum due to fraudulent claims.