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Fake Claims

Reviewed by Vineeth | Updated on Sep 30, 2020

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Introduction

Fake claims are those insurance claims that are made with fraudulent intentions. Fake claims are exaggerated and false and are made by the policyholders to gain financial benefits from their insurance policy purchased from the insurer. These practices are illegal. However, these are commonly found, and the insurance companies have a separate team to identify such claims filed by the policyholders.

Breaking Down Fake Claims

Fake claims are overstatement of legally acceptable claims made by policyholders. For instance, a policyholder of a house insurance policy might have been robbed of his belongings kept at home by a robber.

The policyholder in a bid to make additional gains from the policy may exaggerate the list of items stolen from the house in his claim report. He might say that his items are worth way more than what they actually are. The policyholder might have made this overstatement with an intention to claim a much larger amount from the insurer in the claim settlement. This is the reason why insurance companies often investigate claims that are of higher quantum.

How Insurers Identify Fake Claims

Insurance companies will try to identify patterns in the type and frequency in recent claims. Insurers generally maintain records of insurance claims that they receive and conduct investigations to analyse the numbers they obtain out of it. This will help insurance companies to figure out the individuals that are more than likely to file claims and abuse the system.

If the claim is not matching with the general pattern, then the insurance companies will make a note of it. Apart from that, the insurers will make use of several indicators to find probable reasons for receiving fake claims. Insurers, to find out fake claims, get support from investigation units. These units employ professionals who are capable of performing background checks and have obtained permission for the same from the required departments.

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