1. Auto Theft
Cars are stolen quite often and there are two main ways that
the bad guys make a living with stolen cars. The first involves “chop shops” where crooked mechanics disassemble
cars and sell the parts off. The
second method involves the sale of the vehicle to overseas buyers with no
paperwork.
2. Staged Auto Accidents
Quite often two or more people will conspire to stage an
accident in order to collect on insurance claims for totaled vehicles. If the value of the car is inflated,
the perpetrators will scheme to collect and profit from the insurance
payoff. Claims for faked injuries
from a staged accident are also common.
3. Pocketing Repair Costs
Often people will forego repair costs to their damaged car
and pocket the cash, or spend it on something other than the actual
repairs. This can be done quite
easily, especially in cases where a car is damaged but still drivable.
4. Medical Insurance Claims
There are many reported cases of medical insurance fraud
every year involving crooked health care providers. In these cases, doctors and clinics bill insurance companies
for procedures and/or medications that were never needed. In the worst cases, procedures get
billed to an insurance company that were never even completed. In other cases, fake patient names are
used to scam insurance companies.
5. Unnecessary Medical Treatments
You may already have been involved in a medical insurance
scam without even realizing it. If
your doctor is prescribing treatments that are unnecessary and billing your
health insurance company, this is a form of medical insurance fraud. Beware of doctors who continually
change the types of procedures, and be especially cautious if you are asked to
undergo various unsuccessful treatments.
6. Arson Fires
Burning down a house to profit from an insurance policy is
all too common. Those who are deep
in debt or who may be behind on their mortgage routinely seek to collect from
an insurance policy, and the most lucrative way to do this is often from a
total loss resulting from a fire.
Forensics in this area has become quite advanced, and most of these
criminals are caught. While the
bad guys in these cases may go to jail, and won’t get any insurance money, most
policies contain a section that requires the insurance company to pay off any
mortgage, even if the policyholder intentionally set the fire. This is a huge cost to the insurance
industry.
7. Storm Damage Claims
A common type of insurance fraud involving homeowners
insurance involves making new claims every year for the same damage. The scam works like this; an insured
may have a roof that leaked one year causing some water stains in the
house. They make a claim with the
insurance company, and get paid for the roof damage and for the interior
damage. They fix the roof so it does not leak any more, but never fix any
interior damage, pocketing that cash.
The next year they switch insurance companies and make a claim for
interior water damage, which is not new damage at all, but which is the same
damage from the prior year.
8. Theft Claims
One of the most common forms of homeowner’s insurance fraud
involves theft of personal items.
People will submit a claim for a break-in and theft, and tell the
insurance company lies about what was stolen. In some cases, there may have been a few things taken, but
the actual list of items submitted to the insurance company is a fake inventory
created by the insured to inflate their claim.
9. Life
Insurance Fraud
While this is quite an elaborate scheme, it is not
uncommon. This involves a person
who takes out a life insurance policy naming their cohort as a
beneficiary. The perpetrator then
fakes his own death and hides for several months. Once the beneficiary is able to collect the payout, they
both disappear pocketing the cash.
10. Fake Injury Claims
People who intend to collect money for injuries can easily
fake a fall down or auto accident.
While injuries often do occur, sometimes there is no physiological
damage apparent. While a doctor
can diagnose physical trauma, they cannot diagnose pain. If a patient tells them it hurts, the
doctor must put that in a medical report even if they believe it to be untrue.
