GENERAL FRAUD INDICATORS

Insurance fraud takes on many different forms.  The following bulleted lists under various types of insurance situations are presented as potential "Red Flags" that might suggest that further investigation be employed to rule out insurance fraud or deceit:

THE APPLICATION:

•Insured not living or working close to Agency

•Insured lied on prior loss section of application

•Application returned unsigned - willing to pay cash

•Insured used third party to make application

•Reluctance to use mail for information

•Application not signed in Agent's presence

CLAIMS FRAUD

•Lack of memory on prior loss information

•Excessive pressure for immediate settlement

•Excessive knowledge of insurance terms/procedures

•Recent increase of policy limits

•Questions to Agent about coverage just prior to loss

•Lack of memory about prior Carriers/Agents

•Reluctant to meet for interviews or provide details of loss

•Retains Public Adjuster or "known" Attorney immediately

•Lack of documentation or "too good" documentation

•Will not use mail system (USC Title 18 Mail Fraud)

•Reluctance to send FAX information (Wire Fraud)

•Refusal to sign Information Releases

•Becomes very nervous when told an investigation will be conducted

•When interviewed, has "rehearsed" story and selective memory or details change

ARSON FOR PROFIT INDICATORS

•Manufactured, altered receipts or misrepresented replacement receipts - lack of receipts for big ticket items

•Hidden damage of property prior to loss (examples: Termite damage, plumbing leak, etc.)

•Fires during remodeling (found too much work needed/insufficient funds available)

•Policy about to expire or new policy just obtained

•Vacant buildings with no potential - Building For-Sale

•Financial distress indicated - Recent bankruptcy, job loss, poor recent credit history, a number of declinations for loans, etc.

•A fire that occurs between 2:00 am - 5:00 am

•Investigation finds that the insured removed items from the fire site just before the  fire

•Family photos, prescriptions, personal effects, trophies, etc. are not found at the scene during post-fire inspection.

•Area of greatest damage and fuel load do not match

•Inside family pet(s) survived the fire

•The insured has a history of prior fire losses (especially significant if the previous fires occurred under similar circumstances)

•A build-up of previous losses/claims amounts

•Normal living items missing or replaced with obvious substandard items (props).

•The fire occurs while the insured and/or other occupants of the dwelling are gone for a long weekend

•Unreasonable or insufficiently explained delay by the insured of reporting the loss.

•If installed, the fire/burglar alarms and/or sprinkler systems inactive at time of loss

•Recent adverse notices to Insured by City Government or applicable zoning/housing department(s).

•Interior doors appear to be locked at time of fire, causing the firemen to forcibly enter various areas of the structure.

•More obvious: tips called in to the insurance company, local law enforcement or fire department implicating the insured.

•The insured provides an extensively detailed inventory of the loss quickly after the fire.

•The insured sends others to provide loss information, avoiding direct contact with the insurer.

•A recent divorce (residential fires, in general) or business dissolution (business fires, in general) is discovered.

•Obvious financial distress, such as delinquent or unpaid property taxes, or the indication that a Sheriff Sale is/was imminent.

•The insured was recently arrested or sued, indicating the need of cash.

•Fires that occur in a building housing a recently closed business.

•Discovery that the insured had recent medical problems without proper insurance coverage (again, the indication that immediate cash is needed).

FRAUDULENT BURGLARY/THEFT INDICATORS

•Personal items missing with little actual cash value.

•Items that are taken would not normally fit into pick-up truck or van in one load.

•No obvious signs of  forced entry into the premises, and a limited number of keys are known to be available to others.

•The alarm or security system was not in operation at the time of the burglary.

•The burglary or loss occurred during a three day weekend when the insured is said to be out of town.

•Despite the loss, the insured does not appear to be in a  hurry to "get his/her life back to normal".

•Inspection indicates that older items (not antiques) were taken and newer items were left, possibly of more value.

•A list of the items taken would not appear to naturally fit into the remaining space.

•Interviews with neighbors suggest that a number of items were brought in to the loss location or removed from that location immediately prior to the reported loss.

•The insured claims that a large amount of cash was taken.

•A history of prior losses, similar in nature.

•The absence of receipts for big ticket items, such as televisions, computers, stereos, etc.

•The insured provides an extensively detailed inventory list immediately after loss.

•Recent bankruptcy, divorce, or indications or marital or financial problems such as job loss, business failure, medical problems not covered by insurance, payment deadlines missed.

•The items taken that were reported to the police are different from the missing items reported to the insurance company.  The list provided to the company is more extensive than to the police.

•Indications of financial trouble, such as recent suits or judgments against the insured.

•Recent partner split or dissolution of business.

•A number of obviously altered or replacement receipts provided to the insurance company.

•Loss occurs under a new policy or one about to expire with no renewal indication.

•The insured is not available for interviews, and/or sends others to provide information to the insurance company.

•The property where the loss occurred is for sale, or the business merchandise that is reported stolen has no or little resale potential.