Insurance companies deny claims for many reasons, ranging from perils that are not covered to failure of the insured to cooperate with the investigation of a claim. While many justifications given for denying a homeowner's insurance claim amount to nothing more than a bogus excuse to delay or deny a valid claim, there are legitimate reasons that an insurer might refuse to pay a claim. If an insurer commits fraud, this might result in both a claim being denied and criminal charges.
However, policyholders need to understand that sometimes insurance companies threaten to bring fraud charges unsupported by evidence to avoid paying valid claims. Based on my experience as both a former claims adjuster and as an insurance attorney, I have provided some examples of key red flags insurance companies focus on when investigating the possibility that a claim is fraudulent.
Analysis of Claims History: If an insured has submitted an abnormally high number of claims or claims for an anomalous amount of losses, this will tend to raise red flags with insurance companies. Based on insurance company statistics, the most common type of non-professional insurance fraud involve homeowners’ claims and auto insurance claims. For example, an individual might claim items were destroyed during a fire or stolen during an auto break-in that never existed in the first place. Insurance companies keep in-depth records and have tools to analyze complex data to look for trends or anomalies that might suggest a claim is fraudulent.
National Insurance Crime Bureau (NICB) Suspicious Loss Indicators List: The NCIB has created a list of loss indicators that are supposed to suggest that a claim may be false. Some of these factors that insurance companies consider include:
- Medical claims by seasonal employees facing a layoff
- Policyholder who provide handwritten receipts for repairs
- Property damage from a fire that occurs shortly after a family dispute or immediately after the family vacates a vehicle or home
- Sudden increases in coverage a short time before submitting a claim
While none of these circumstances mean a claim is not legitimate, circumstances like these and others on the NICB list mean that the insurer will more closely scrutinize the claim.
Use of Private Investigators: Many types of claims involving injury, including long-term disability insurance, auto accident insurance or other forms of insurance might result in an insurance company contending that the severity of injury and extent of disability is being exaggerated. When insurance companies have such suspicions, they may use private investigators to gather evidence. The private investigator might stake out your home to get photos or video of you engaging in conduct that can be used to challenge the seriousness of your injuries. The private investigator might also talk to witnesses, review criminal records, conduct background checks or inspect accident sites. If you have an insurance claim based on suffering injury or illness, you should assume you are always subject to surveillance.
Use of Special Investigation Teams: Most insurance companies have special investigation units (SIUs) that can conduct more extensive investigations of alleged fraud claims. These teams are usually comprised with employees who have specialized knowledge like former police officers and health care professionals. These investigators might conduct burn pattern analysis if a claim is submitted for fire damage to develop evidence that the fire was intentionally set. Similarly, these investigators might analyze the dent pattern on a motor vehicle to determine if it is consistent with the accident report.
Spy on Social Media Activity: Because many people are now in the habit of sharing many facets of their life on social media websites, these sites have become a valuable source of information for insurance companies. If you use Facebook, Linked In, Twitter or any other social media site, you should presume that the insurance company is monitoring everything you post on the site. Insurance investigators might look for information that suggests you are less disabled than you indicated or that you faked damage to your roof to get an insurance settlement. Many attorneys advise that individuals with pending insurance claims abstain from any social media activity until their claim is settled. Even the private areas of your social media site are not safe because judges are increasingly ordering plaintiffs to provide their login information for their social media site. Some judges have even sanctioned plaintiffs for attempting to delete information from their social media site after being ordered to provide the login information.
If your insurance company is trying to intimidate you by threatening criminal charges of fraud or arson, we might be able to help. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.