What To Know About Insurance Fraud Investigations

Insurance agencies are in the business of helping people in need. Though you must turn a profit in the end, your primary goal is to protect people from the risks in their life. However, certain clients take advantage of their insurance and try to rig the system. Here is what to know about insurance fraud investigations as an insurance agent.

The Types of Insurance Fraud

Every insurance agency must know the warning signs that a client is trying to pull their leg for more money. There are two main types of insurance fraud: hard and soft fraud. Hard fraud refers to claims that are entirely fabricated from top to bottom. The insured will make up a story and damages in an effort to scam an insurance agency for money.

Soft fraudsters take a situation and embellish it out of proportion. These hyperbolic claims can make a small problem look much worse than it is. For example, a doctor could bill a patient for more procedures than were given, increasing the insurance payout from the patient’s provider. Whether you offer insurance for the patient or the doctor, you will want to know what’s going on and conduct a proper investigation.

How You Conduct an Investigation

An insurance fraud investigation is just like any other investigation—you need a convincing array of evidence to connect the dots and confirm past events. You’ll likely look into video recordings, patient logs, medical records, incident histories, eyewitness accounts, and more. Each piece of the puzzle will help you determine the legitimacy of the insured’s claim and whether they falsified their claim.

A Word of Caution

Every insurance agent and adjuster must be careful not to make mistakes or wrongly accuse clients. If you make such mistakes, it is best to have an insurance agent’s errors and omissions insurance policy. This professional liability insurance exists specifically for insurance agents and adjusters who need protection from their clients.

Learning what to know about insurance fraud investigations can help you fill in any gaps and move against suspicious claims.