Making fraudulent insurance claims can land you in jail
Bernie, an adjuster for a major auto insurance company, reached out to H. Dennis Beaver, a columnist, to share a story that he thought would make an interesting column. Bernie appeared concerned about a questionable insurance claim made by Carol, who had her work truck stolen under suspicious circumstances.
During their conversation, Carol recounted the incident by stating that her truck was parked outside her office when two individuals jumped in and drove it away. She expressed anger over her non-functioning tracking device, which could have helped locate the stolen vehicle. Additionally, Carol claimed that $20,000 in cash, intended for paying her employees, was inside the unlocked truck’s glove box.
However, upon further examination, it became clear that Carol’s story was highly questionable. The insurance industry typically excludes consequential damages, such as contents of the vehicle and lost business income, from warranty coverage on tracking devices. H. Dennis Beaver explained these warranty exclusions to Carol, casting doubt on her claim.
Carol reacted angrily to the skepticism and accused H. Dennis Beaver of being a no-good lawyer. However, H. Dennis Beaver warned her of potential legal consequences, including law enforcement involvement and prosecution for insurance fraud. Additionally, Carol could face cancellation of her auto and business insurance policies or significant rate increases if she pursued the claim.
To gather more perspective, H. Dennis Beaver consulted with experienced claims adjusters from three different insurance carriers. They all found Carol’s story completely unbelievable and classified it as a clear case of hard fraud. They emphasized that Bernie, Carol’s adjuster, was actually doing her a favor by not immediately escalating the matter to the company’s fraud unit.
Interestingly, one of the adjusters revealed a tactic used by her company to catch fraudsters. They would issue a check to the insured, and upon their arrival to collect it, law enforcement would be waiting to arrest them.
Seeking further insight, H. Dennis Beaver consulted Karl Susman, an insurance broker based in Los Angeles. Karl cautioned against making dubious or fraudulent claims, highlighting the long-lasting implications such actions can have. Insurance companies report questionable claims to national databases, which can significantly impact future insurance rates and coverage options.
Karl advised everyone to exercise common sense and avoid increasing the risk of loss or injury through careless or negligent behavior.
Ultimately, Carol’s case serves as a reminder that attempting to make fraudulent insurance claims can lead to serious legal consequences, including imprisonment. Insurance companies and professionals are trained to detect suspicious claims, protect against fraud, and ensure that legitimate claims are paid. It is essential for policyholders to act in good faith and understand their coverage limitations to maintain a positive relationship with their insurers.
Remember, honesty is the best policy when dealing with insurance claims.
