Understanding the Role of an Insurance Investigator

By July 18, 2017Insurance Fraud

Man showing insurance plan

An insurance policy is an important safeguard for individuals and companies. It guarantees against loss from accidents and, depending on the policy, other life-changing events. Companies can protect themselves, their assets, and their employees with the right kind of insurance policies. Similarly, individuals can protect themselves against possible loss of income and even safeguard their loved ones’ future in case of their death.

However, just like other social safeguards, there are people who are tempted by undeserved financial gain. The Coalition Against Insurance Fraud notes that $80 billion is lost annually due to insurance fraud. Any loss due to fraud not only affects the insurance companies but also the other policy holders.

With so much being lost to insurance fraud, an insurance investigator is an important asset to any insurance company. With their years of experience and various investigative skills, these investigators are able to confirm if a claim is fraudulent. This can allow companies to deny payment or minimize the amount that they have to pay.

Some Types of Insurance Fraud

Here’s a short list of insurance fraud that often occur and would benefit from an insurance investigation:

  • Car Insurance – One common fraud is when criminals stage accidents where they purposefully collide with another vehicle or get run over by one. They would then place the blame on the other driver and claim against that person’s insurance. In this case, both the insurance company and the policy holder lose – the insurance company due to the fraudulent claim and the policy holder due to increasing premiums. Another type of fraud is when a claimant will falsely report their car stolen and collect insurance.
  • Health Insurance – Health insurance fraud occurs when a claimant charges for medical services that are not needed or are not covered by their policy. It can also occur when they are charging more to insurance than what the medical service actually costs.
  • Worker Compensation Insurance – This occurs when a worker suffers an injury but falsely claims the severity of the injury or that it occurred while working. There have been cases where “injured” workers were enjoying strenuous physical activities when they were supposed to be immobilized.

Why Are Insurance Investigators Important?

As previously mentioned, insurance fraud can be very tempting. Insurance companies have the obligation to ensure that fraud is detected and prevented. Not only does preventing fraud allow them to safeguard their business but it also lets them continue servicing their other policy holders.

Most claims are straightforward and no red flags are raised. In these instances, the insurer pays out according to the policy. But insurance fraud works because, more often than not, the company does not really know the claimant and fraudulent papers can be manufactured. This makes it hard for insurers to confirm whether some claims are valid or fraudulent. When they suspect that a claim may be fraudulent, then it’s time to get an insurance investigator.

Like any other fraud investigation, insurance investigators are able to determine the facts behind a suspicious claim. They will gather evidence and produce a report that will confirm the claim or disprove it. They have the skills and experience to conduct interviews, review documents, and even place the claimant under surveillance if needed.

If the claim is false, the evidence they gather can then be used in a court trial. If the claim is valid, then the insurance company has performed their due diligence in protecting their policy holders.

Insurance companies find that hiring an insurance investigator’s services is a good expense. Better to spend some money rather than lose a lot of it to fraud.

 

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