Red Flags of

Insurance
Fraud
SAI
 Red flags of insurance fraud
might include any of the following

The claim is made a The insured has a The insured The insured is very assertive and
short time after the history of many previously asked an insistent about a fast settlement,
policy’s inception, insurance claims insurance agent and exhibits more than the usual
or after an increase and losses. hypothetical amount of knowledge about
or change in the questions about
insurance coverage and claims
coverage under coverage in the
event of a loss procedures, particularly if the
which the claim is claim is not well documented.
similar to the actual
made. claim.
In a burglary loss, In a theft or fire In a fire loss claim, the
the claim includes loss claim, the claim does not
large, bulky claim includes a lot include personal or
property, which is of recently sentimental items,
purchased, such as photographs
unusual for a expensive property, or family heirlooms,
burglary. but the insured that would usually be
cannot provide listed among the lost
receipts, owner’s property.
manuals, or other
documentary proof
of purchase.
The insured cannot The insured already Information on a life Applicant fails to Pertinent questions on the
remember or does has receipts and insurance application sign and date the application are not answered,
not know where other is very vague or life insurance such as income, other
they acquired the documentation, ambiguous as to the application. insurance carried, hazardous
claimed property, witnesses, and details of health duties, or aviation or flying
especially unusual duplicate history: dates, places activity.
items, or cannot photographs for of treatment, names
provide adequate everything, making of physicians or
documentation. the claim seem too hospitals, or specific
perfect. diagnosis.
The insured has excess insurance,
either shown at the time of
application or developed through
an underwriting report of
database information.
Earned income does not
warrant the amount of
insurance being applied for.
The applicant’s date of The agent is exerting a The physician’s report is
birth as shown on the great deal of pressure to very vague on details of
application is much have the policy issued past medical history
earlier than shown with because of the large and does not coincide
other carriers or in amount applied for, but with the information
previous applications or does so without the shown on the
policies. underwriter’s application.
knowledge.
 A death claim is presented in which the death

€1k has taken place outside of the country.

The signature on the application for insurance

does not appear to be the same signature as
£700 shown on an authorization at the time of the
claim.

A claimant or claimant’s attorney attempts to

$500
limit the type of information to be related by a
signed authorization, which is a standard
authorization used by the company.

An attorney is immediately brought into a

contestable death claim, attempting to
£250 interfere with the investigation and to
withhold information required by the
company.
 An autopsy report
discloses a different height
The death claim package sent to
and weight than what is
the insurance company is too well
shown on the recent
packaged and complete in every
application. Dental records
detail with supportive documents.
do not coincide with those
Documentation that was not
dental findings as shown
initially requested or required by
by an autopsy report.
the insurance company was
voluntarily sent.

2020 2043 2063

2025 2050

A contestable death claim that is Records are missing on a

reported as an accidental death
could possibly be a suicide (e.g.,
fatal accident involving only one
vehicle, a hunting accident, an
accidental shooting while cleaning
a weapon or repairing the same).
patient who was confined
to a hospital, or records are
missing on a patient from a
physician’s office.
Pressure for speed of handling—
claimant wants to stop by the
office to pick up their check “as
we’re leaving for a trip in the
morning.”
• A series of prescription numbers from the
same drug store do not coincide
chronologically with the dates of the
prescriptions.
• An automobile fire occurs in a very remote
rural area with no witness, but the driver
claims that an electrical shortage in the
engine compartment caused the entire car to
catch fire.
• Preliminary information for a business fire
loss or home fire loss indicates considerable
financial difficulties and financial pressures
being brought upon the owner, and the fire is
suspicious in nature and/or origin.
 An employee within the claims
operations of an insurance company
is known to have a drinking problem,
drug problem, financial pressures,
serious marital difficulties, or an
extramarital affair, and irregularities
start to appear.
Any information on a Public transportation accidents
claim that has been filed in which there are more
if it is determined that passenger claims filed than there
there is deliberate cover- were passengers at the time of
up or false statements the accident.
contained therein.
 A witness to an An official document of findings is in
accident or incident complete conflict with the facts in
deliberately tries to the case and there is no explanation
hide from for this conflict of facts.
investigators rather Photographs or other documents do
than come forth not substantiate the reported
and tell the truth. findings.
When dealing with burglary losses from a business or home, the investigator
observes any of the following:
− The remaining contents at the scene are of a much inferior quality than those
items reported stolen.
− There is no indication of indentation in the piling of the carpet where heavy
items of furniture or equipment were to have been placed.
− There are no hooks or nails on the walls where valuable pictures might have
been hung.
Documentation provided by the insured is irregular or questionable, such as:
− Numbered receipts are from the same store and dated differently or
sequentially.
− Documents show signs of alteration, such as dates, descriptions, or amounts.
− Photocopies of documents are provided and the insured cannot produce the
originals.
− Similar handwriting or signatures—or the insured’s apparent handwriting—
appears on different receipts, invoices, gift verifications, appraisals, etc.
− The amount of tax is wrong, either for the price of the property or for the date
appearing on the receipt.
− Receipts, invoices, or shipping documents do not have Paid, Received, or other
shipping stamps.
− In a theft or loss away from home, the insured waits an unusually long time
before reporting the theft to the police.
− The insured is able to give the police a complete list of lost property on the day
of the burglary or shortly after.
− The amount of the claim differs from the value given by the insured
to the police.