Question

Pursuing an insurance claim is a possible action when a compant discovers fraud

A. True

B. False

Answer 1

The said statement is true, as an insured is entitled to pursue a claim till it is not proved that there is an involvement of fraud.

To better understand, let us look at process of discovering and proving a fraud:

Methods of discovering fraud:

1. Analytics and Technology: A company can take help of statistical models to detect fraud. If an individual or company has a high number of claims or unusual circumstances it may be flagged by the insurance company’s software for further review. They can also use social media accounts to gather additional information.
2. Common Sense: If a claim seems to be highly unreasonable or the series of events explained do not match with the investigation, it develops doubt for fraud.
3. Claim History: If there is history of submitting many claims, insurance company may look into it more closely.
4. Cooperation: Insurance companies shares data with each other which gives them an edge to detect a pattern, if any, and find frauds.

Once an insurance company discovers the risk of fraud, a special investigative person or team may be assigned to investigate. An investigation is held to either verify or disprove the claim. If the insurance company is able to prove a strong case of fraud, the company may deny the claim, revoke the person’s insurance policy or get the police involved.