ON GUARD û Fraud Spotter #30 - Insurance Fraud - Pt. 1
By Laura Quarantiello
® 2004 Tiare Publications Group
723words
Take a close look at the next bill you receive from your insurance
company. How much is protection of self, home, and property costing
you? Perhaps more than you planned and maybe more than you need or
can afford. Experts say that the steadily escalating numbers on your
premiums are primarily caused by widespread and growing insurance
fraud, which costs the industry tens of billions of dollars each
year.
Fighting fraud within the system is extremely difficult, simply
because it so often goes undetected or unreported. Hard fraud, which
are attempts to secure payments through staged or non-existent
accidents, injuries, theft and arson, are being committed by
unscrupulous professionals within the ranks of physicians and
attorneys. These people are experts at manipulating paperwork, which
ends up bamboozling insurance companies into paying out for false
claims.
Fraud against the industry is nearly equaled by fraud committed by
the insurance providers themselves. Huckstering agents often defraud
their clients, convincing them to buy policies they don't need,
delaying payments or refusing to pay claims. The very
word "insurance" implies a permanent and lasting trust. When we sign
up for health, life or automobile insurance we are placing our trust
in the company we have retained, counting on them being there when
we need them. If and when that hour comes we may be devastated to
learn that our insurance agent is nothing more than a shyster and
the company he works for won't back us up or help us out.
The Coalition Against Insurance Fraud is lobbying for legislative
and industry reform to help curb the problem, but education and
awareness are the only real ways to combat this type of fraud.
Phony Accident Rings
Staged auto accidents, also known as swoop-and-squats or zoom-and-
squats, are becoming more commonplace. Though the methods vary, the
outcome is the same. A battered vehicle swerves in and out of a
large truck's lane, barely avoiding a collision. Eventually the
truck strikes the car. But this isn't some reckless or intoxicated
driver. This is a staged auto accident, designed to obtain insurance
money. It's a carefully planned, down and dirty form of insurance
fraud.
Investigators report that there are often three tiers to such
organized crime rings. The top tier is composed of unscrupulous
professionals such as physicians or attorneys, who are more than
willing to diagnose injuries, even if they don't exist, or file
fraudulent claims.
The second level is made up of "cappers" - just like the shills of
street con fame - who do the grunt work of finding expendable cars
and doling out the resulting claims to the top tier pros. The last
tier includes the people hired to drive the cars and put their lives
on the line in exchange for money. The con itself is simple, if
potentially deadly.
The entire cover story is concocted and arranged before anyone takes
to the streets. Bottom tier participants then drive out in search of
a suitable, well-insured target. Once a good target has been singled
out, the squat car goes to work, pulling in front of the target for
a little game of cat and mouse. The goal is to get the target
vehicle to impact the squat car. And it does, often spectacularly.
Once the collision has taken place, victims howl about injuries and
are treated for the most dubious kind: whiplash, sprains and other
problems that defy easy diagnostic confirmation. Insurance claims
are then filed, with the largest amount of cash ending up in the
pockets of the lawyers and doctors. The dishonest souls actually
involved in the staged accident end up with a few thousand dollars
and those who set the whole thing up also walk away with a
substantial share of the cash. There are always people willing to do
a little dangerous driving in exchange for money. To insurance
companies it means billion dollar losses each year.
Cousins of these accident rings are "floppers" and "divers;"
scammers who pretend to be hit by automobiles in order to collect
insurance. These scams work best when the vehicle is turning a
corner or moving away from a stop sign. The con artist simply steps
off the curb and bounces off the fender or door. Part actor and part
stuntman, the con artist always gives a great performance and the
insurance company usually pays off.
(End)
Laura Quarantiello hates criminals and the crimes they commit. Her
book "On Guard" can help you minimize the risk you family faces from
criminal elements. Get more information at:
www.tiare.com/onguard.htm
