Personal injury-related insurance fraud is a severe crime that can result in serious criminal charges. This type of fraud typically involves falsely claiming that someone was injured in an accident or exaggerating the extent of the injuries. It is also common for people to file claims after staging or planning accidents, or making false statements about theft, arson incidents, and car crashes.
Different Types of Insurance Fraud.
In the world of insurance fraud, there are two categories you need to be aware of: accidental fraud and intentional fraud.
Accidental fraud occurs when an insured person makes a mistake (such as a clerical error or failing to disclose information) which results in them receiving benefits they were not entitled to receive.
Intentional fraud, unfortunately the most common type of insurance fraud, occurs when someone knowingly or deliberately makes false statements or misrepresents facts on their insurance application form with the intent of obtaining insurance benefits that they are not entitled to receive.
Sadly, insurance fraud is on the increase. While the information below is not specific to fraudulent personal injury claims, it has been added to illustrate the increase in fraud in general in South Africa.
The Association for Savings and Investment South Africa (Asisa) has published its life insurance claim statistics for 2021, showing a significant increase in fraudulent and dishonest claims. South African life insurers detected 4,287 fraudulent and dishonest claims worth R787.6 million across all lines of risk business in 2021. This is a significant increase from 2020, when 3,186 cases of fraudulent and dishonest claims to a value of R587.3 million were uncovered.
The data shows that funeral insurance once again attracted the highest incidence of fraud and dishonesty, followed by death cover, disability cover, hospital cash plans and retrenchment benefit cover.
Read the full article here: BusinessTech
What Are The Civil Repercussions of Filing a Fraudulent Personal Injury Claim?
When you file a fraudulent personal injury claim, there can be serious consequences. Your insurance company may deny your award from a claim. In this situation, the insurance company will refuse to compensate you for any losses associated with the claim. Alternatively, the insurance company also has the option of dropping you as a customer and blacklisting you for your actions. Once blacklisted, it is unlikely that you will be able to obtain insurance coverage in the future.
In more serious matters, if you have been found to have committed fraud on a personal injury claim, the insurance company can file a lawsuit against you for the complete losses they suffered due to your fraudulent claim. This includes the amount paid out in claims and any costs incurred during the investigation of your fraudulent claim.
Particularly egregious actions can result in punitive damages being recovered by the insurance company. These damages, meant to punish lousy conduct, can quickly multiply the size of the insurance company’s claim against you! Failure to pay damages could result in the insurance company requesting a lien in court, which means that they can stop you from selling or gaining any profit from certain assets without them being notified first and entitled to the proceeds. The company would also have the ability to garnish your wages.
What To Do if Someone Files a Personal Injury Claim Against You.
The first thing you should do if someone makes a personal injury claim against you is preserve as much evidence as possible. Evidence might include writing a statement or bullet point list of details of the event in question from start to finish. You can refer back to this when speaking with your insurance company to ensure you don’t forget anything. Any photographs of the damage or video footage from a dashboard camera or CCTV will also be helpful.
The second step is to inform your insurance company quickly and honestly about what has happened. If there are any witnesses who can back up your story, get their contact details and ask them if they are willing to speak to the insurer.
If there is any dispute over liability for the accident, then it may be necessary for the case to go to court. In this case, you should speak with a professional attorney specializing in personal injury claims to obtain legal advice and representation throughout this process.
How Can I Spot the Signs of Fraudulent Personal Injury Claims?
Unfortunately, it can be hard to tell if a personal injury claim against you is genuine. Fraudulent claims are often well-researched and presented in an authentic manner.
However, there are some warning signs of fraud to watch out for. Insurance companies and private investigators are very experienced in detecting fraud, and these ‘red flags’ are the standard signals they look out for.
A common sign that the claimant intends to commit fraud is if they have a low income or are in debt. Suppose you are experiencing instability in your financial life. In that case, it is vital to be sure that any insurance claims you make are legitimate and not part of a calculated effort to make money. Insurance companies will scrutinize your claim more if they suspect that you are making a fraudulent claim, which could lead to a denial of coverage. However, this is not to say that low income or debt is always a sign of fraudulent activity.
A claimant willing to accept an early settlement is not always being dishonest. It may be that they cannot afford a long process of deliberation. However, some fraudsters try to close a case as quickly as possible to shorten the time in which they might be detected. If the claimant is pushing to close early, they may either be in financial distress or be attempting to avoid getting caught.
Insurance companies investigate any previous claims by the individual, including their success rate and compensation received, to check for any patterns. While previous personal injury claims are by no means proof of fraudulent activity, a history can indicate a willingness to pursue claims as a means of making money.
Vague, changing or unsubstantiated evidence are one of the most common and clear warning signs of fraud. In all cases of dishonesty, if the evidence is insufficient or keeps changing, there are strong signals that the party is not being truthful. Most personal injury claims are filed weeks after the event has occurred, ensuring that a focused and clear account can be given. If the claimant provides a vague statement of events, they may be hedging their bets against what counter-evidence might come out later.
How Can I Protect Myself From Fraudulent Personal Injury Claims?
Businesses that deal with the public are vulnerable to several types of fraud, including general liability and workers’ compensation fraud. While these types of fraud can be difficult to defend against, you can take steps to protect your business.
Keeping thorough and consistent records is one of the best ways to protect your business against fraudulent claims. You should also periodically check your premises for potential hazards and record when the inspection occurred. These records will help if you need to prove that a threat was not present at a specific time of a claim.
General liability fraud is much harder to execute than workers’ compensation fraud. It can also be harder to defend and prove as fraud. The best defenses are diligence in record keeping, alertness, observance, and thinking about what could happen in your business before it happens. This will allow you to be on the lookout for fraudulent activity or claims against you in advance.
In Conclusion
In summary, personal injury claim scams occur when someone intentionally deceives a victim by staging accidents or filing false claims. Many personal injury-related insurance fraud cases go unreported and undetected because it is difficult to gather information about each of the players involved in a staged accident or false claim, as well as proof that there was actually no accident or injury involved. The best way to combat this is to be aware of all of the elements that contribute to a personal injury-related insurance fraud scam and know how to recognize them if you come across them in the course of your life.
