by Bill Lamb
Insurance Fraud costs
$32 Billion Annually
In March 2015, the Insurance Information Institute announced that industry-wide fraud has an annual price tag of $32 billion. That’s right! Billion with a “B.” Reports confirm that insurance fraud accounts for roughly 10 percent of all property/casualty losses and it can get as high as 20 percent for auto insurers. Proper background investigations could save the insurance industry one billion of that, if not more. Not an investigation conducted by a Special Investigations Unit (SIU) but rather by a bonafide background investigator. That’s because quite often the SIUs aren’t aware of the various avenues available to assist in mitigating claims.
Make a Positive Identification
The first—and most important—step in background investigations is making a positive identification. Don’t depend on a defense attorney to help. They’re notorious for providing little to no information about a claimant and oftentimes the information is incorrect. They also have been known to supply medical records with conflicting birth dates. As a result, it’s difficult to know exactly who you’re looking at.
Then there are the subscription database companies, another source of convoluted information containing multiple birth dates and Social Security numbers. Background investigations should rely on at least three different data providers in order to do the job correctly. Assuming the only database you use is correct is just that—an assumption.
Once you have a positive ID on your claimant the work begins. If your search has been done correctly you’ll know where to look.
Running a Claims Search
Running a claims search is another great tool. Unfortunately, if the subject has been involved in a claim that was never entered into the system, it won’t be in the database. If you run the individual’s Social Security number through the claims database and come up short, how will you know if the last adjuster even inputted the number? You won’t. You won’t find the prior claim either.
You also have to contend with data providers who claim to check criminal and civil records. Inexperienced claims personnel frequently assume that the comprehensive report mentions criminal records. When nothing shows up they assume—again—that there are no criminal records. The problem is these data providers only scratch the surface when running a criminal search. For the most part, their results come from compiled public records.
Interpreting the Results
Once birth dates and Social Security numbers have been identified you’ll have an address history that will tell you where to look.
For example, if a claimant resides in Chicago’s Cook County, the only way to check the county’s civil and criminal records is to actually go to the courts and look! While there usually are positive identifiers on criminal records, you won’t find a birth date on most civil filings. Many times the only identifier is an address, which usually is enough.
Behavior patterns can show up in a variety of places, including:
multiple lawsuits, including claims for injuries
history of violence
criminal and protective orders found in conjunction with divorces.
All these behaviors can provide insight into your claimant and give you leverage when it comes time for a settlement conference.
If a claimant has had prior treatment for the same or similar injury, you need to know! In many cases, we have seen claimants treat several days before your loss. Hospital checks are useful for this type of occurrence. While we cannot access confidential medical records, we can tell you where and when they treated. Detailed treatment information can then be obtained with a release. Do not miss this opportunity to discover prior injury.
The Personal Touch
INTER-FACTS is a full-service professional investigations and research firm based in the Chicago area. Our private investigator network provides skilled surveillance techniques and research services throughout North America. Each insurance fraud investigation begins with your goal in mind. We deploy our most effective insurance fraud investigation services to your case.
INTER-FACTS investigators begin with a complete assessment that includes:
asking you questions that help us help you,
explaining the issues involved with the case and
preparing a plan that will achieve your desired goal