Insurance of any kind is almost synonymous with business in the United States. Since 2015, insurance carriers have contributed more to US GDP than banks. Between the premiums we all pay for everything from keeping our car on the road to protecting our child at school, these companies are extra cautious about their operations. The total cost of insurance fraud outside the health insurance sector is estimated to be more than $40 billion per year. That translates to $400 and $700 per family per year. No wonder all of our premiums are so high!
Where do all of these insurance scams come from? When people fake an injury during a car accident, our premiums go up. Whenever home contractors levy a scam against a homeowner, we all pay the price. Even the recent Covid-19 relief packages have included over $60 million dollars in personal fraud cases.
We live in a litigious society, and people who want a quick buck are more than happy to take advantage of our legal system if it means they get an extra couple of weeks out of work and relaxing on a couch on our dime. People who use insurance scams to make money do not care if they affect children or the elderly. They sleep perfectly fine no matter the education, income, or personal situation of their victims.
That is why we think it is essential you be exposed to the more common insurance frauds that happen to everyday consumers. Hopefully, this list will educate you on how to protect you and your family from handing over thousands of dollars that should be yours to keep.
Car Insurance Fraud
You probably have seen the videos on social media of cars swerving in front of a driver only to slam on their brakes, cause an accident, and then blame the driver who rear-ended them. At first, what may look like a Russian traffic video ends up being an insurance scam artist living in Boston, MA.
Car insurance frauds always involve someone hiding information or lying about the facts of the case. From intentionally damaging their own car, to ‘crash for cash‘ scams and everything in between. This way, they get to inflate their insurance claims. You may have had a friend who did this in their younger years. Perhaps they got into an accident and suddenly, a brand new laptop magically appears in their claim that they just happened to have picked up that morning and was destroyed in the crash.
Unfortunately, there is not much you can do in these situations. You can pick up car cameras for pretty reasonable prices. These allow you to record your driving using an SD card or Bluetooth connection to your smartphone. Other than that:
- Always leave enough distance between you and the driver ahead of you
- Stay off of your phone while you drive
- Count the passengers in a car in case you do get in an accident
- Take down any names, phone numbers, ID numbers, and license plates
- Use your phone to take pictures of the other car and passengers
Always involve the police. If someone is in an accident and they do not want the police involved, that should be a giant red flag. Insurance companies require police reports to make their decisions.
Medicare & Health Insurance
Healthcare in the U.S. is always a political football. While politicians argue the merits of different programs, scammers take advantage of the system by targeting your IDs, Medicare number, and other personal information. This is easily attained information that can be used to file claims on your behalf. That means you could suddenly see a Medicare report for a visit to an orthopedic consultant for a neck brace that you never needed or wanted.
Never give your social security number, health insurance, or bank information to anyone without first verifying who they are. This includes your Medicare information. The same is valid for filling out applications for aid or insurance forms at your doctor’s office.
A common scam here is people calling you up and claiming to be from the IRS or Medicare agency. The best thing you can do is ignore these calls and contact your provider directly to confirm they do not need more information.
Yup, with the new virus comes all kinds of people hoping to take advantage of government money. By the end of July 2021, Covid scams had cost the American taxpayer more than $500 million, and that number has defiantly gone up since then. A couple of things are happening here. First, there is a lot of money to be had. The government has issued numerous checks and funds to people all over the U.S., and that always puts a strain on the criminal community.
The second reason is confusion. The media and political leaders have made a mess of information related to Covid. Many people are scared of doing or saying the wrong thing, and that is fertile ground for scammers to use to their own benefit. There are practically endless fraud alerts coming out of every state’s AG office.
You do not need Covid-related travel insurance or to answer any questions from random people on the phone trying to sell you a miracle cure. Instead, stick to the FTC’s state-specific data on avoiding these scams and never volunteer private information of any kind to anyone you do not know over the phone, online, or anywhere else.
The final scam we want to warn you about involves false claims. This is a “catch-all” category where people call up your phone for anything from Microsoft Tech Support to accepting donations to a Cancer Fund. Let’s be clear, you do not volunteer information to unsolicited calls. If you need tech support, you call someone, not the other way around. If you want to donate to a charity, you do it online using a secure system, not from a random caller interrupting your dinner. The same is true for any insurance information.
Hang up whenever your instincts suggest you are talking to someone who may not be who they claim to be. 99% of the time, that will be the end of the conversation. For those rare situations where they keep trying, contact the source directly. Don’t be afraid to call Microsoft and ask if they are actually trying to reach you. The same is true for banks, credit cards, travel insurance, or any other type of insurance situations you may be involved in.
Where to Find Help
We at Privin Network often get hired by clients who are on the other side of these insurance scams. Instead of helping them prevent the situation, we are called in to try and find the perpetrators and hopefully recover the money that has already been spent.
Insurance fraud is a challenging thing to research. Luckily, we have years of experience and a skilled team of investigators, with many having backgrounds in law enforcement or as claims adjustors. We know how to navigate this world and help with anything from worker compensation claims to contractors trumping up medical bills for accidents that never happened. If you think you are the victim of an insurance scam, call our team immediately. We can help you through this challenge and mitigate the damages that may occur.