Tags - Popular | FAQ  

PrevPrev Go to previous topic
NextNext Go to next topic
Last Post 04/08/2007 12:01 PM by  Olivegreen
Fraud in Catastrophe Files
 4 Replies
Sort:
You are not authorized to post a reply.
Author Messages
sbeau4014
Founding Member
Member
Member
Posts:427


--
04/06/2007 11:31 PM

    Below is a link to a little information on a suit that will start Monday in federal count in the New Orleans area. Judy Barrasso is the same attorney who defended Allstate in the last trial Allstate had a month or so ago where the fraud/misrepresentation issue was also raised. In that particular case all testimony had been completed and the case was just about to go to the jury with instructions from the judge when the policyholders for some strange reason "withdrew" their lawsuit and walked away with nothing but their own attorney fees to pay (plus what was already paid on the underlying claim).  Of course a plaintiff attorney talked about a pregnant policyholder walking out of the courthouse crying and how the big bad insurance company turned the tables and made the innocent insured the villian in this case.  Keep in mind the policyholder withdrew their lawsuit after all testimony had been completed with zero agreements on anyones part as to what would happen if they withdrew (no payments from Allstate for them withdrawing, and I'd guess Allstate also didn't promise to not come after them for cost etc).  A plaintiff attorney may try to show this as an another attempt of the industry picking on the policyholder, but I can't see any good reason that the policyholder would withdraw at that point of the suit unless they knew they "misrepresented" things on the claim, it had been proven by the testimony and they were dead in the water.

    Now for a little education when it comes to fraud cases in the insurance claims field.  Cat adjusters in general probably don't pay too much attention to this aspect of claim handling, but it is very important and should be looked at in every claim that is presented.  That is part of our jobs as the eyes and ears of the carrier on the front line of a claim.  If you look at the statistics for fraud in claims it is amazing the % of claims and insureds that have fraud involved in them to some degree.  It can be as basic as inflating the claim to cover the deductible, to providing fraudulent repair involces, to actual fabricating the extent and items that are damaged.  Some of the people that have worked normal claims (besides cat) can give some more insite on the fraud aspect  of claim handling

    We are too complacent in our investigation of claims at times and our desire to investigate, evaluate and resolve as many  files as quickly as we can and this in one area that needs work by probably all of us.  Those of us who have never worked anything but cats may not know what fraud indicators or "red flags" to look for. I'm starting this thread for some to give their imput, experience, etc for those who can use some pointers..

    One final thing that all need to know and think about is what committing fraud on a claim may mean to a policyholder.  This varies from state to state and also policies involved (flood).  Some states like TX have weak statutes where there is fraud, the fraudulent part of the claim is not covered, although you may well get a jury so pissed off at the insured they penalize them. Worse case is you have a $100K claim that you can prove $50k in fraud, you may well have to pony up the other $50K.   Some states like LA have strong fraud statutes where any fraud that is proven voids the entire policy vs claim.  In this case, if a claim is paid, and ends going to court and fraud is proven, then the carrier may not only be allowed to get their costs reimbursed, but prior payments on the claim.  These can be serious penalties and they are in place to act as a deterant to fraud.  Probably all states have insurance fraud reporting department, but this in most cases is pretty weak.  most carriers have in house SIU depts, and some are excellent.  We should all look at utilizing them when the the situation warrants it.

    http://www.insurancejournal.com/news/southcentral/2007/04/06/78547.htm   


    0
    Gale Hawkins
    PowerClaim.com
    Member
    Member
    Posts:386


    --
    04/07/2007 4:34 AM

    http://www.insurancejournal.com/news/southcentral/2007/04/06/78547.htm

    Steve, I look forward reading more about this aspect of CAT claims. I have one request in general is that we all make web links hyper when posting them. I figured out how to do it by pasting in the link and then hitting the space bar to turn them blue. I also found even after you post a thread you can turn them on later by clicking on edit and going into the body and spacing after the web address to turn it blue and then hitting submit.

    We all pay higher premiums due to fraud in claims so it is an issue that impacts us all. Thanks for starting this thread.

    0
    brighton
    Member
    Member
    Posts:139


    --
    04/07/2007 4:10 PM
    Steve,

    Being a former "staffie", one of the first things that was pounded into our heads was to LOOK FOR PRIOR CLAIMS that this insured had filed. On more than one occasion, be it a building damage claim or theft claim, you would find that the insured had made claim on the same item. Deeper investigation was needed at that point.

    The same thing hold true in a cat situation. During our Katrina/Wilma stay, we found insured that had claims from both of these losses and '04 losses. The carrier we were working for gave us access to their mainframe and it was required that we review previous losses and that it be noted in their note system that we did such by noting dates of losses and if anything was paid. During our stay, we found a few such losses where duplicate damage was claimed. Since we had the previous estimates in hand when we went to the location, it was funny how a pa or the insured would suddenly remember the old losses or the pa would walk away from a job. By doing this, the carrier was more than happy to keep us on clean up. When '06 turned out to be a bust in terms of storm activity, we kept busy untill the end of July when we said enough.

    Granted, you may not have access to the carriers system to review for previous losses, yes it is time consuming, yes it can reduce the amount of billing but it is the duty of an adjuster to investigate. If you do see what you think is old damage ask the insured about this, bring it to their attention. If they do produce receipts, either make a copy or take a digital of it for your file.

    Then call your unit manager and ask that you be given info on any previous losses if the insured cannot produce any receipts or the story does not check out. Adjust the loss accordingly, pay for what looks like NEW damage and if the insured cannot produce any receipts for repairs and it does not look like any repairs were made, be sure to note in the file and ask if the carrier wants them included in your estimate. There is still the duty to protect property from further damage. Again check with the carrier.

    Carriers are going to be more demanding in making sure that what is paid for should be paid for and rightfully so. You do not pay twice at a store for the same item, why should a carrier be paying twice for the same damages?
    Rocke Baker
    0
    Ray Hall
    Senior Member
    Senior Member
    Posts:2443


    --
    04/07/2007 5:35 PM

    Hail season is here. Its not uncommon to see old hail damage on some insureds roofs. When you get off the roof in this case the first question you should ask : How long have you lived in this house ?  This is a public record and very easy to check and the truth will usally come out.

    0
    Olivegreen
    Guest
    Guest
    Posts:15


    --
    04/08/2007 12:01 PM
    I have only referred a couple of folks to SIU. I find that if I am on a cat claim and I have to think about how something was damaged that's a red flag. Usually I ask rather pointedly if said damage was a result of the storm and reiterate that I can only address storm damage on x/x/xxxx loss date. Usually that is where it gets dropped. If not I will get my manager's opinion but I find that they are lax about it unless they can prove it with certainty. I understand that fraud is most likely in fire claims.
    0
    You are not authorized to post a reply.


    These Forums are dedicated to discussion of Claims Adjusting.

    For the benefit of the community and to protect the integrity of the ecosystem, please observe the following posting guidelines: 
    • No Advertising. 
    • No vendor trolling / poaching. If someone posts about a vendor issue, allow the vendor or others to respond. Any post that looks like trolling / poaching will be removed.
    • No Flaming or Trolling.
    • No Profanity, Racism, or Prejudice.
    • Terms of Use Apply

      Site Moderators have the final word on approving / removing a thread or post or comment.