According to research, loss from insurance fraud runs into the billions of dollars every year. And it’s not only companies that are on the hook for that loss; it’s also customers as well, when businesses recoup their losses through rate hikes.
In Canada, for instance, auto insurance fraud costs consumers about $2 billion a year in increased payments.
Insurance fraud, explains ThinkInsure.ca, is the “intentional or unintentional act of deceiving an insurance company for financial gain. Committing insurance fraud includes providing false information, falsifying documents, and submitting false insurance claims.” The penalties associated with insurance fraud can be severe. Those guilty of fraud of under $2,000 can be incarcerated for up to two years, while fraud of over $5,000 can result in up to 14 years in prison.
An experienced and qualified insurance investigator is an essential component in the overall strategy of unearthing fraud, helping companies mitigate and/or avoid damages. They do this through a number of approaches, including looking at past claims to for any red-flag behaviour, checking out social media feeds, searching computer files for fraudulent billing and charges, and observation to detect activity inconsistent with an insurance claim.
Steps that should be taken to avoid insurance fraud include implementing a proactive framework to detect such fraud.
“Companies should not wait for fraud to occur and deal with it after the fact; instead, they should take actions and implement processes that identify potential fraud early and provide the ability to move quickly when fraud is detected,” offers DXC Technology.
Create a Proactive Framework to Detect Fraud
Steps insurance investigators recommend include establishing a fraud-detection framework, understand the potential fraud level, employing data analysis to detect fraud, creating a process of continually reviewing claims, and being prepared.
“Companies can use a combination of technology, tools and approaches to combat fraud. Through it all, industry leaders must never forget that their focus should not only be on the technology tools they use in detecting and fighting fraud, but also on the human beings in their own offices. Always emphasize fraud training and awareness, implement checks and balances, and be ready to adapt quickly to changing market conditions.”
Investigative Solutions Network, North America’s premier private security and investigative services firms, has an elite team of investigators, with backgrounds in policing and corporate security.
We pride ourselves on professionalism and our standards of excellence. We offer quality, confidential private investigation services, providing our clients with ongoing support throughout the entire process. Whether it’s a corporate, criminal, civil, insurance or personal matter, ISN’s investigators are subject matter experts who consistently exceed our client’s expectations.
For more information about hiring an insurance investigator, please contact us today.