5 Must-Read Responses From The Insurance Special Investigations Unit AMA
Insurance fraud is a significant issue within the industry and it can drive up premiums for honest customers, making it anything but a victimless crime. Recently a reddit Ask Me Anything session with an anonymous Special Investigations Unit investigator presented an interesting side to the issue of insurance fraud. Here are five must-read responses from the event.
Q. “What do you do about people who continually make insurance claims? (I’m talking about my neighbor). … Their boat sunk, in front of their house, on a clear, calm, beautiful September day. The boat needed major work. … They have a new kitchen and whole new downstairs from insurance claims saying leaks … yet their roof was in shambles. … I don’t get it … how come they can get away with these things?”
A. “Luck. … Inexperienced adjusters, adjusters that don’t care — it’s easier to pay than it is to investigate. … If they keep filing claims it’ll eventually catch up to them. Like I already mentioned, insurance companies share info and know who files claims. … And if you’re concerned and have cause to believe they’re committing fraud, most companies have a fraud hotline and we’d really appreciate the tip! Ours gets lots of calls. Some are just scorned exes or jealous neighbors but many are great tips.”
Q. “Auto insurance question: my coworker has a car that his dad bought and paid for, and his dad pays the insurance on it as well. My coworker drives it daily and is the actual principle driver. In the event of an accident, is this sort of arrangement cause for you to deny coverage?”
A. “Absolutely, I would say this is one of the most common things I investigate. … Because the dad bought and paid for the car, he has insurable interest in it. He should be the one to insure it. However, the coworker needs to be listed as a driver of the vehicle on the policy. If he is not, the company can and often will deny coverage for any claim on that car, because there were ‘material misrepresentations’ in the facts given to the company when they agreed to insure that car.”
Q. “What are the biggest pressures at for a SIU? Are the clients you investigate difficult and/or dangerous? Or do pressures /targets from your company make it stressful?”
A. “We don’t have pressure to ‘prove’ cases. The company that I work for is very ethical and genuinely, honestly wants to do the right thing for legit customers. We do have timelines to stick to. I can’t just let cases pile up while I put my feet on my desk, surf reddit, drive around and eat donuts. … I am expected to investigate the cases I get thoroughly, if it’s merited. Otherwise, I kick it back to claims and they pay it. Other than that, there’s really nothing that I am ‘held to.’ … The people I investigate can indeed be difficult and rude. I’m used to that. As for dangerous, I know at least one of my colleagues has been shot at and another had a gun pulled on her. So yeah, it happens.”
Q. “… so the conditions for a case being merited vs being possible fraud are based on your judgements?”
A. “Good question, that’s something that lawyers ask a lot. … The answer is “sort of.” I do not make the decision to pay or deny a claim, that’s the adjuster’s decision. Sometimes I miss being able to do that. … What I do is present the adjuster with my findings – we often do a teleconference and/or I send my case report over. They decide what to do with the claim from there. Sometimes they need more info and ask me to follow up. … If the claim is denied or reduced, I report the insured to law enforcement/state dept. of insurance, and the national insurance crime bureau. Then my case is closed.”
Q. “How often do you investigate cases and discover that there is no fraud?”
A. “Very often. About 60-70% of the cases referred over to us end up being paid in full. Now, this doesn’t mean that ALL of those were completely legit. Maybe we couldn’t prove it. Maybe a state law forced the company to pay the claim. Or the adjuster accidentally cut the check (it happens!). I’d guess that once you filter those out, about 40% of the claims referred to me are not fraudulent at all; it’s just a misunderstanding or a wrong-place-wrong-time deal. … Sometimes it feels good when I can actually help a person prove their legitimate claim. Some people just aren’t that articulate or they don’t appear to be very trustworthy, but they are good honest people. You know the type.”
This AMA was a bit more interesting than your typical one because it shows a little-seen side to the fight against insurance fraud. And that’s a fight that shouldn’t only include special investigators, but one that should also include the efforts of agents and customers. Check out the full thread for lots more great material.