AUTO CLAIMS FRAUD RED FLAGS

             AUTO CLAIMS FRAUD RED FLAGS
By Robert Carper

The two kinds of fruad you will enciunter are:

       Soft Insurance Fraud. Soft insurance fraud (also called “opportunistic” insurance fraud) is the most common type of insurance fraud. Soft insurance fraud occurs when the claimant makes an inflated claim, such as exaggerating the severity of a car accident neck injury.

       Hard Insurance Fraud. Hard insurance fraud (also called “premeditated” insurance fraud) occurs when the claimant devises a way to make an insurance claim. This type of insurance fraud usually involves some sort of deliberate action, such as intentionally causing an accident or staging arson or theft of the vehicle.

Initial Claim

   ·    There are multiple occupants in the claimant vehicle.

     ·  Accident within a month of the termination of the policy.    

   ·    A rental vehicle is involved.

   ·    Accident occurred shortly after one or more vehicles.
         ·    Insured insists that claimant caused the accident, such as by stopping suddenly, for no apparent reason.

·     Accident is at low speed with minor physical damage, yet there are multiple bodily injury claims.

    ·     One or more claimants list a P.O. Box or a motel/hotel as an address.

·     Claimants immediately seek attorney representation.

   ·     Address of attorney, auto body shop, doctor, etc., are an unusually long distance from claimant's residence address or work location.

·     Accident occurs at an odd hour, like very late at night when there are few places to drive to at that hour, or in the middle of a weekday afternoon, when most people are at work.

Ongoing Claim

    Vehicles:

    ·     Minor collision results in excessive repair costs.

    ·     There appears to be prior damage to the vehicle.

 ·     Impact is relatively minor but repair shop wants to charge to straighten frame.

      ·     Damage does not align between vehicles. (color of paint transfers, height of damage, location of damage, motion of damage, shape of damage, etc.)

·     More than one vehicle involved in the accident goes to the same auto repair shop.

·     The appraiser has a hard time arranging an inspection of the claimant vehicle, or it is already repaired and thus cannot be inspected.

    ·     "Cash" repair invoices are offered as proof of payment for car repairs, rather than cancelled checks or credit cards vouchers.

Statements:

   ·   Claimants do not accurately describe the physics of the accident (Note: the upper body of an automobile occupant will always move toward the point of impact.)

    ·   Claimants cannot provide minor details of the accident, such as descriptions of landmarks at the accident scene, detailed descriptions of the doctor who allegedly treated them, and how their medical examination was conducted, etc., but only provide a basic story with no further details that one might expect them to remember.

·     Claimants are hesitant or overly vague in their responses to basic questions.

·     All claimants treat at the same facility.

·     The diagnosis, symptoms and length of treatment are very similar for all claimants.

·     Injuries are all of a subjective nature, such as soft tissue injuries.

Medical Reports:

·     The RVS or CPT codes used for the initial examination ends in a "4" or "5" for soft tissue injuries only.

    ·     The RVS or CPT codes for interim or final examinations do not change from the initial examination.

·     Medical treatment is extensive, ongoing for more than 2 months or so, on a minimal impact accident.

·     No claim is made for lost earnings despite extensive medical treatment which would have consumed numerous hours during the normal work week.

·     Medical reports are photocopies, or appear to be of the "cookie cutter" variety, where the claimants' names and data are placed into a computer which then spits out a pre-written report.

General:

    ·     Index returns indicate an active claims history.

·     Claimants seem overly familiar with the claims process.

·     Claimants are overly pushy for settlement.

   ·     No towing charges claimed when damage estimates suggest cars could not, be driven from the accident scene.

 

THE AUTO POLICY EXCLUSIONS

 

THE AUTO POLICY EXCLUSIONS
Robert Carper

The auto policy contains exclusions that apply depending on many factors. This post offers a glimpse of auto policy exclusions but does not cover the entire topic. It is a brief overview. Depending on your needs and situation consult your agent, claim rep or staff attorney as the situation dictates. All liability policies have exclusions. These exclusions are typically unique to the particular policy and vary depending on the type of coverage that is being underwritten.  Sometimes an endorsement can “buy back” coverage depending on the carrier’s contract, the type of exposure and other factors.
Exclusions listed in a personal auto insurance policy vary depending upon what state laws permit and then the guidelines of your car insurance company. When something is noted as excluded on your policy, it means that your policy won’t cover it.


Exclusions can be associated with a person, property, location, peril or specific situation.
The most common exclusion regarding a person is a named driver exclusion. With this, you and your insurer agree to exclude a specific person from your policy’s coverages. This driver isn’t rated on your policy, and in return your insurer won’t cover the individual if found driving your car.

Here’s a look at some of the most common exclusions found in the different parts of a personal auto insurance policy.
Bodily and property damage liability exclusions
Most policies plainly state they don’t provide liability coverage:
• If an insured has intentionally caused injury or property damage.
• For property damage to property owned (or being transported) by the insured. (So if you hit your own car you can’t make a liability claim)
• For property damage to property that is rented, used by or in the care of the insured.
• For bodily injury to the insured or any member of an insured’s family residing in the insured’s household. (Some states only allow

the policy to reduce the bodily injury limits for family members to the state's minimum)
• For liability arising out of the ownership or operation of a vehicle being used for “livery conveyance.” This means using your vehicle in transportation of goods or people for payment – so don’t use your car as taxi or delivery service. So, don’t use your car for delivering pizzas, or you may void your coverage.
In general, using your vehicle for business purposes can be a no-no according to your liability policy.
Catastrophic events or exposures are usually marked as excluded as well. This can include items such as bodily injury or property damage resulting from:
• Nuclear exposure or explosion – including the resulting fire, radiation, or contamination.
• Bio-chemical attack or exposure to bio-chemical agents as a result of an act of terrorism.
• War (declared or undeclared)
Vehicles that are excluded from coverage (or deemed unacceptable to cover for either liability or physical damage coverages) vary but the list may include:
• One with less than four wheels
• Designed for use principally off public roads or not registered for use on public roads
• Any vehicle owned by you or a family member but isn’t listed as insured on your policy.
• Any vehicle furnished for your regular use but isn’t listed as insured on your policy.
• Any vehicle used for the purpose of competing in a race or practicing or preparing for any prearranged or organized racing or speed contest.

Some insurers have amended policies to include an exclusion for any vehicle that is operated, maintained, or used as part of a personal vehicle sharing program. So, loaning your vehicle out for to a car-sharing service could mean you have no personal coverages.
Physical damage coverage exclusions

Collision and comprehensive coverage are the physical damage coverages offered by auto insurers. While liability insurance covers those that you damage, collision and comprehensive cover your own vehicle if it’s damage.
Exclusions under this portion of the policy can be similar in many ways to the restrictions listed in your liability portion of your policy. Typically, collision and comprehensive coverage exclusions include loss or damage due to:
• Wear and tear
• Freezing
• Mechanical or electrical breakdown or failure
• Road damage to tires
• Catastrophic events - radioactive contamination, nuclear weapon discharge, war, etc.
• Destruction or confiscation by government or civil authorities
• Using your vehicle for livery or delivery purposes
• Vehicle being used for racing purposes
• Intentional damage
• Vehicle used in personal car sharing programs (some insurers)

Personal items that are damaged in your vehicle or stolen from it aren’t covered, and most policies specifically mention the exclusion of coverage for losses to:
• Any electronic equipment that is not permanently installed.
• Custom equipment (or is covered to a specific minimal amount -- such as $2,000) unless you’ve added a custom parts and equipment endorsement to your policy.
If a vehicle is excluded from liability coverage, then typically it’s also unable to obtain physical damage coverage. However, there are some vehicle that insurers allow to obtain liability but not collision and comprehensive -- such as vehicles with a salvage or rebuilt title.

Medical payments and uninsured motorist bodily injury
Medical coverages you can purchase for yourself as part of an auto insurance policy have exclusions as well. Typically, they include injuries sustained in circumstances mentioned above, such as catastrophic events, racing or livery service, as well as situations such as:
• Injured on a motorized vehicle having fewer than four wheels
• Injured while using the vehicle as a residence
• Injuries that workers compensation benefits should cover because occurred during the course of work

Overlapping insurance policies create an exclusionary situation.

To be aware of your exclusions and restrictions, read your policy and then contact your car insurance company if you have questions.