Insurance fraud like arson casts suspicions on legitimate property damage claims
If torching a building to get the insurance money wasn’t so wrong, it would almost be a cliché. The crime is certainly up in lights in Hollywood from time to time as films depict desperate individuals committing arson to weasel out of a tough financial spot. Insurance fraud is also in the spotlight at insurance companies and in insurance associations that track fraud statistics.
No doubt about it, insurance fraud is a big problem, and it has a direct impact on you as a policyholder in that insurance claims departments in many companies tend to lump you in with the crooks. In short, your claim is considered suspicious just because the company is trying to protect itself from bad actors.
The most common type of insurance fraud is in healthcare. Cue up another cliché. An individual injured in a car accident exaggerates neck or back pain to up the settlement. Now, you get in a car wreck and are actually injured. Depending on which insurance company you’re dealing with, your claim will receive close scrutiny in the fraud department.
In cases of wind or flood damage, property owners sometimes try to include previous damages in the claim. When the field adjuster disputes the fraudulent claim, it creates conflict. When you have a legitimate claim, the fraudsters make it all the more difficult to show you are acting in good faith.
As an attorney dealing with property damage disputes with insurance companies, I see nothing but bad practices and aggrieved clients. It would be easy for me to conclude that all insurance companies are out to underpay or to deny legitimate claims, and I would be wrong. It’s human nature to draw erroneous conclusions based on unique personal experiences, regardless of whether or not those conclusions are based in reality.
Although some unscrupulous property owners exaggerate claims or commit other types of insurance fraud, they’re not the only ones to exaggerate. I find that certain associations that track insurance fraud grossly overblow the actual magnitude of the problem. It serves the industry if companies can more easily claim that policyholders are acting in bad faith. Lower payments or denials of legitimate claims pad the bottom line.
Some insurance industry associations assert that arson is the most common type of insurance fraud. Yet, a thorough study of authoritative crime statistics indicates that most cases of arson involve teenage boys or men with an unhealthy attraction to fire. They commit arson for the thrill of seeing the fire and first responders rush to the scene to put it out. Profit isn’t the motive.
As a policyholder, it’s important for you to understand where the insurance company is coming from if any questions about the legitimacy of your claim arise. While it may be annoying to have to jump through extra hoops to prove your claim is real, don’t blame the insurance companies too much. Blame the crooks.