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Insurance Fraud

Commercial Crimes » Insurance Fraud

What is insurance fraud?

The main offence involving fraud is cheating. However CCID also investigates offences under forgery and criminal breach of trust. Insurance fraud means the fraud happened within the insurance industry. It can be divided into three main categories:

How do the conmen cheat their victims in insurance fraud?

In order to understand how the conmen cheat their victim in insurance fraud, we should look into the modus operandi (M.O.) of the cases. There are so many M.O. in insurance fraud.

Modus Operandi

Third Party Bodily Injury Claim (Motor Policy)

The most frequently reported cases in insurance fraud fall under the ‘Third Party Bodily Injury Claim’ (Motor Policy). Fraudsters normally use very simple techniques to cheat the insurer. They use forged documents which are copied and amended from the original copy to show that an accident happened. Today, these people are smart enough to create a real accident, so that it’s difficult for investigators to prove the fraud.

Case Example 1: Third Party Bodily Injury Claim (Motor Policy)

Case Example 2: Third Party Bodily Injury Claim (Motor Policy) (Sympathy Claim)

Case Example 3: False Life Policy Claim

Case Example 4: Medical expenses claim

An agent submits a claim saying that a policy holder had medical treatment at a private clinic. He colludes with the doctor who prepared the medical report. The medical report actually contains false information.

Case Example 5: False Life Policy Claim

Case Example 6: Syndicates

How does the public avoid falling for these scams? What are the dos and don’ts?

The public should buy their insurance policy from a registered insurance agent or buy direct from the insurance company to avoid forged cover notes or policies. The insurer enquire about the income of the policy buyer to deter syndicates from using this opportunity to scam the insurer. The insurer must have a good system in processing claims, especially in recording all actions taken by their staff or agents (who acted and when) in order to facilitate the police with evidence if a fraud does happen.