BROADCASTS.com

b'

Even Honest People are Tempted To Commit Insurance Fraud   

https://zalma.com/blog

Career criminals are not the only people who perpetrate insurance fraud.  The temptation has become so great that almost anyone who is given the  opportunity, will try. Those who do not premeditate insurance fraud are  called perpetrators of soft frauds. Most are small. Some are not. The  story that follows is a not a soft fraud but one that was premeditated  for a great deal of money by a person who should have known better.  Some years ago, residents of a hillside community received a letter from  the county engineer informing them that their houses sat on an active  landslide. The engineers concluded that an unusual amount of irrigation  water, water from septic systems, and rainfall lubricated an ancient  landslide under their homes and that the slide was moving. The engineers  were concerned because it was moving at the rate of three inches a  year. The houses sitting on the landslide were also moving a few inches a  month. Within ten years the houses would be torn apart by the movement  if nothing was done to stabilize the hillside.  Homeowners, living on the hill, noticed cracks in the plaster walls.  Concrete block walls split at the mortar seams. Cracks formed in the  foundation systems. Since the homes on the hill were all valued from  $500,000 and $5,500,000, the monetary value of the potential loss of 300  homes on the landslide was enormous. Many of the homeowners gathered  and hired counsel to pursue persons responsible for their damage.  As a lawyer the intentional concealment of a material fact with the  intent to deceive an insurer to its detriment is fraud, a criminal act,  and if convicted, grounds for disbarment. For that reason, the insured  accepted the denial and did nothing further about the claim.  Had the insurer not done the minimum investigation and retained the  services of a competent engineer it would have paid the $2,500,000.00  claim. Had the insured\\u2019s fraud been presented to a prosecutor he could  have been arrested, tried and convicted of attempted insurance fraud and  would have been disbarred.  He was lucky that the insurer agreed to a mutual rescission of the  policy, a return of the premium, and to forget what was attempted.  \\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.