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Every Adjuster Must be Familiar With the Indicators of Fraud  

https://zalma.com/blog

Suspicious claims have common attributes. Insurers and their anti-fraud  organizations have collated the common attributes into lists of  indicators or red flags of fraud. The lists were created as training  aids and to be used to determine whether further investigation is  required to determine if a claim is legitimate or false and fraudulent.  Continually growing, these lists are known as the \\u201cred flags\\u201d or  \\u201cindicators\\u201d of fraud lists. There are many different categories,  ranging from those associated with the claim itself or with insureds to  indicators of specific types of fraud, such as bodily injury fraud or  arson for profit.  The existence of red flags does not mean a fraud has occurred. Red flags  are only a signal to the adjuster to investigate further so that the  suspicion may be either removed or confirmed. It is not any single  indicator that alerts the adjuster to the possibility of a fraudulent  claim but a combination of the red flag or red flags discovered coupled  with the results of the thorough claims investigation.  Although the existence of multiple red flags should trigger an  investigation, failure to investigate has been held to be reasonable as  long as there are no patent inaccuracies or actual knowledge of false  representations.  As the Nebraska Department of Insurance states in its booklet, Fraud  Detection Hints, it is \\u201cimportant to remember that the \\u2026 possible \\u2018red  flags\\u2019 [indicate] that there may be some evidence consistent with an  insurance fraud scheme. Any one or two of these by themselves may not  raise your suspicions; however, when you have several of these hints  (red flags) present or a pattern begins to emerge, you should  investigate further or forward your suspicion to the Insurance Fraud  Prevention Division.\\u201d  \\xa9 2021 \\u2013 Barry Zalma  Barry Zalma, Esq., CFE, now limits his practice to service as an  insurance consultant specializing in insurance coverage, insurance  claims handling, insurance bad faith and insurance fraud almost equally  for insurers and policyholders. He also serves as an arbitrator or  mediator for insurance related disputes. He practiced law in California  for more than 44 years as an insurance coverage and claims handling  lawyer and more than 52 years in the insurance business. He is available  at http://www.zalma.com and zalma@zalma.com.  Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE  Legend Award.  Over the last 53 years Barry Zalma has dedicated his life to insurance,  insurance claims and the need to defeat insurance fraud. He has created  the following library of books and other materials to make it possible  for insurers and their claims staff to become insurance claims  professionals.  Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry  Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry  Zalma on YouTube-  https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg;Go to the  Insurance Claims Library \\u2013  https://zalma.com/blog/insurance-claims-library/Read posts from Barry  Zalma at https://parler.com/profile/Zalma/posts; and Read last two  issues of ZIFL here.