• This Blog Will Have a List of the Most Outrageous and Unbelievable Insurance Fraud Cases. 

The type of claim that is assigned to an insurance investigator will largely depend on the types of insurance. For example, various insurance programs are segmented into categories; Homeowners, Automobile, Ocean-Marine, Medical, Life Insurance, Commercial, Aviation, etc. 

I have had the opportunity to work in all of these product lines and each have unique stories associated with an investigation. The scenarios below are all discussed in my recent book, In Bad Faith. 

Jilted Lover 

As a former fire investigator, I had occasion to inspect scores of fire scenes both as a police officer and insurance investigator. One case that stands out (a little) is a case involving a motel that had experienced an explosion and fire. The origin of the explosion was narrowed down to one room on the single story, wood-frame constructed motel. The front of the room was blown outward, and the roof over the room was blown off the building. The occupant of the room survived the blast, however later succumbed to burns a few days later. 

We learned that the occupant, a young man who had just broken-up with his girl-friend was despondent. He purchased a twelve-pack of beer and returned to his room in the motel. He duct-taped the door jam and mechanically removed the gas-line leading to a space-heater in the room. He then  turned on the television and consumed most of the beer. He fell asleep, probably thinking the gas fumes were toxic (they are not) and he would never wake up. But he did. Of course he needed to relieve himself of the beer after which, he decided to have a smoke. That is when the room came apart in a ball of fire. I had been working as an insurance investigator and this claim was settled and the motel repaired. I was unaware of any life insurance in place at the time of his death, but a life insurance policy would not cover an intentional act (suicide). 

Serious Ceramics 

A young, single lady reported the theft of an antique ceramic figurine collection valued at over one hundred twenty-five thousand dollars. She later provided a statement in which she articulated the break-in of her apartment and a copy of the police report. She also provided an appraisal of the collection. She had been the beneficiary of her father’s estate after his death in West Palm Beach, Florida. I located the Probate record which contained an appraisal for a ceramic figurine collection and placed the value at one hundred dollars. The claim was denied. 

Swoop and Squat 

Imagine cruising along on the freeway in a line of traffic, listening to the FM radio and thinking about the day ahead. Suddenly, a car speeds past you on the right and cuts in front of you, nearly causing contact with your vehicle. But it’s not over. This driver has three passengers and suddenly slams on the brakes for no apparent reason. You have no time to react because his vehicle is only inches in front of you. Your vehicle makes contact with the intruding vehicle. You pull to the side of the freeway and inspect the damage and speak with the driver.  

The damage to you vehicle reveals less than you had expected. There is damage to the rear of the other car, but it is drivable. You call to report the accident. When an officer arrives, the driver and all three passengers indicate that they have suffered back injuries and request an ambulance. 

This scenario is common in most major cities and gets it’s name, Swoop & Squat from the drivers intentional set-up for an unavoidable rear-end collision. 

The ‘injured’ occupants will complain of back pain, headaches, double vision, tinnitus, and lawyer-up. They will all be treated by the same medical providers , mostly chiropractors who will submit invoices over a period of months.  

A fraud investigator has their work cut out for them. There are a few important issues that will uncover evidence of previous claims. A thorough search of insurance data-bases will likely reveal previous claims from all or most of the claimants. Some may have dozens of previous claims for personal injury, most of which were settled by an insurance company to avoid extended litigation. 

Challenging the attorneys from the firm of Dewey Cheatem and Howe, representing the claimant’s to produce billing and previous claim information puts them on notice that the company is not going to entertain any settlement demands.  

This scenario is but one on dozens of fact-patterns encountered by the insurance fraud investigator.  

Another tool used by the claim handler is assigning a private investigator to conduct surveillance on the claimant. This is likely where the insurance company gets information that the claimant in involved in physical activity that they have denied an ability to perform. 

Not So Stolen Wedding Ring 

The police report indicated the insured reported an expensive diamond engagement and wedding ring set stolen from his residence. The two-carat ring was valued at twenty-five thousand dollars. The insured provided proof of purchase for the ring and in his statement to the investigator, said that he had intended to present the engagement ring to his fiancé, but that it had been stolen before he had the opportunity to present it to her.  

Following up with the prospective bride revealed that she had broken off the engagement and as far as she was concerned, the wedding was off. Further interview of the owner of the jewelry store where the set was purchased revealed that he had returned the ring to the store and paid a ten percent return fee and credited his credit card with the balance. The ring set was still on display at the store. 

Seeking Truth 

While interesting to discuss the incidents of fraud, it is important to bring out the fact that many of the claims investigated turn out to be valid. The investigator seeking only the truth of the matter will find as much satisfaction in validating a claim and in uncovering fraud. 

Disclaimer: I am not an attorney. The examples  discussed are based on my own personal experience. I am not offering legal advice. The reader is advised to consult with an attorney to help with legal advice.