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Top Ways to Prevent Fraudulent Insurance Claims

Sat, Mar 09, 2019 at 3:05PM

Top Ways to Prevent Fraudulent Insurance Claims

Each year, fraudulent insurance claims cost businesses and individuals thousands of dollars and countless hours in lost productivity. For some nefarious people, creating a constant stream of fraudulent claims is a way of life.

While putting a total end to such claims is a daunting and possibly fruitless endeavor, the good news is that there are ways to avoid falling victim to fraudulent activity. That includes partnering with an insurance firm well-versed at detecting and preventing these issues from occurring in the first place. Read on to discover how you can steer clear of fraudulent insurance claims. 

1) Understand the Threat

In general terms, fraud happens when someone knowingly and willingly works to take advantage of a person or situation in order to get money, benefits, goods, and/or services for which they didn’t offer adequate (or any) compensation.

Fraudulent claims can stem from a variety of scenarios, including auto crashes, medical insurance matters, workers’ compensation, property insurance, and many other situations. While legal recourse is possible following fraudulent activity, it’s often best to practice prevention. The process begins by partnering with reliable professionals expert at risk management and other insurance coverage options.

2) Know the Dangers and Recognize the Signs

As mentioned, some people today make a living from scamming innocent and unknowing victims. Such scams include fake tech support, false charities, fear mongering, and many other tactics.

Some companies and individuals even work hard to make their farces seem legitimate. Along with mentioned preventative action, businesses can also team with dedicated professionals who help the company detect and solve potentially-fraudulent activity. 

For companies, the biggest threats often involve the statement of inaccurate figures. For example, a claim might state sales inconsistent with financial statements. On the other hand, a business might understate expenses as a ploy to seem more profitable. Sometimes, costs will be inflated so disreputable employees can pocket the difference.

3) Team with a Trusted Resource

Thankfully, there are ways you can notice red flags before they become a larger issue. For instance, pushing for quick settlements could be a strategy to cover up details. Irregular documentation (such as checks, receipts, invoices, and similar) is another cause for alarm.

No one expects you as an individual or business leader to be able to detect and prevent fraudulent claims on your own. Still, as you’re focused on work and life duties, it’s nice to know that professional assistance is available.

Trusted and reputable insurance agents can offer valuable assistance in a variety of ways. That includes analyzing the claims history of outlets who may be attempting to cover up criminal activity. Your agent will also investigate suspicious loss indicators, observe social media content, perform cross checks, and more.

In terms of risk management, your responsible insurance agent will identify your risks and help you minimize and ultimately avoid risky situations that could put you in financial danger or worse.  In fact, since 2002, we’ve been the go-to resource for risk management and a variety of other insurance options. That includes business and commercial, construction, homeowners, and automobile insurance. Contact us today to learn more about how you can protect yourself, your business, and your loved ones at all times through innovative and comprehensive insurance coverage.

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