How does the insurance company detect fraud
Insurance fraud: This is how insurers proceed in the event of manipulated damage reports
According to the insurance industry, every tenth claim reported is not a claim at all. Under 24 million insurance claims reported annually find each other 2.4 million Cases of Insurance fraud. The damage reports submitted are often about scratches in the car paint or higher insurance damage. Judging by the opinions of the insurance industry, these deceptive behaviors bring them, in property and casualty insurance alone, additional costs of four billion euros annually.
Trifle delicacies add up
The problem of the insurance is the case presentation of the policyholder. Because this shows the incident as a minor offense, so that the insurance company's hands are tied. As a rule, there is rarely any damage from more than 250 euros brought to the notice of damage (often liability damage), whereby the liability insurance is obliged to pay compensation. With the increasing number of small claims, insurance companies end up lacking the money for really serious claims. It is precisely these deceptive machinations that force insurance companies to burden their honest insurance customers with higher insurance premiums.
In order to catch the perpetrators in the act, the insurance companies have formed a network among themselves. Accordingly, they have introduced a database that records all damage: the so-called notification and information system (HIS). The on April 1, 2011 The notification system launched is intended to support the insurance industry in the detection and prevention of insurance fraud and abuse as well as in risk assessment. In this way, the interests of the honest insurance customer can be protected.
Claims clarification discourages insurance fraudsters
With the help of a procedure known as the damage investigation, the insurer can determine whether the damage report submitted is really a case for the insurance company.
The procedure contributes to the clarification of insurance fraud and helps to combat it. If, after clarifying the damage, it turns out that the damage submitted was insurance fraud, the perpetrators will shrink from making another attempt. In order for investigators to successfully shelve a damage investigation, they must have a feeling for fraudulent situations and have examined all possible influencing factors as well as damage possibilities.
Damage investigation procedure
When investigating fraud, they take the following steps:
Suspicions need to be clarified
At the beginning of a submitted damage report, the clerk initially suspects whether it is actually a settlement case. It is of crucial importance whether the suspicion is confirmed or refuted. In this case, the clerk will put the following criteria to the test:
- Previous damage
- Contract changes
- Payment history
- Damage documents
- Claims notifications
- Receipts and invoices
Any abnormalities in the damage are not only examined on the basis of the documents available, but also with regard to the answers to the following questions:
- Are there witnesses? What is the relationship with the applicant, relatives, friendship, etc.?
- Were you asked questions about insurance coverage before reporting the claim?
- Has there been any damage in the past twelve months?
2. Examination of the documents received
A case of fraud can be detected as soon as the damage documents submitted are checked. Because the documents received often give indications of the motive of the damage. In addition to the check, possible insurance fraud can also be detected using the following questions:
- Has the insurance contract been concluded within the last six months?
- Has the damage report been submitted quickly and completely after the time of the damage?
- Is the applicant fully informed about the course of the damage?
When examining the actual course of the damage, its scope and occurrence, the applicant's facade often begins to crumble. They demonstrate suspicious behavior, get confused in their statements and unintentionally leave traces of their attempted insurance fraud:
- little information-rich statements about the damage
- Invoices that do not relate to the damage item
- Destruction or removal of the damaged item
3. If the suspicion is confirmed, further research will be carried out
If the suspicion of insurance fraud is confirmed, the clerks will investigate the evidence further. The following aspects are the focus of their investigations:
- Concealment of acquaintances of persons involved
- Frequent change of insurance due to damage
- Existence of criminal record
Experts check the nature of the damaged item
In contrast to this, the clerk can also involve experts in the investigation for some activities:
- Analysis of the damaged item
- Examination of the amount of damage
- Authentication of certificates and invoices
In the course of the authenticity check, the expert examines the documents for any abnormalities:
- Are the mandatory information correct?
- Does the manufacturer of the damaged item exist?
- Is there an original invoice?
Whether this invoice is the original or a forgery can be determined with special color and infrared video image systems. The use of infrared light makes it easy to identify forgeries or changes to documents.
Opportunities to take action against insurance fraudsters
If insurance fraud is discovered after the damage has been investigated, the insurer can file a criminal complaint against the fraudster and initiate civil or criminal law measures:
If the civil law penalty is applied, the fraudulent policyholder faces the following consequences:
- Insurance refusal to pay
- Loss of insurance coverage
- Reclaiming the services already paid and the costs incurred
Consequences of Criminal Law
In contrast, the policyholder expects the following effects within criminal law:
- If convicted, fines or imprisonment between five and ten years
Trying to commit insurance fraud is generally not advisable. After all, with their damage investigation procedure, insurance companies have an accurate instrument that exposes the lies of nimble fraudsters.
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