One of the biggest challenges insurance companies face is detecting insurance fraud. Whenever there is a possibility that someone will be paid for filing a fraudulent claim, there are also stupid people who are willing to try.
Here are some recent examples. The names have been omitted to protect the stupid:
1. Fire (I like this story because of the name of the restaurant).
JACKSONVILLE BEACH, FL: Two men were arrested and charged with insurance fraud after a 2008 fire in Wakey, Wakey Eggs & Bakey. The fire started in the kitchen after the restaurant closed on May 5, 2008, causing more than $ 200,000 in damage.
One of the owners was arrested and charged with arson and filing false insurance claims. Mr. T., a contractor, was also arrested on the same charge. The owners of the building had just evicted the owners of the restaurant for not paying the rent.
2. Silly insurance adjusters … there are a lot of them.
BALTIMORE, MARYLAND: A Maryland woman pleaded guilty to writing company checks to herself and depositing the money into her own checking accounts while working as an insurance claims adjuster.
A woman pleaded guilty to a theft charge of more than $ 500. She was sentenced and ordered to return more than $ 16,000 that she had stolen from Nationwide Insurance Company between September 2006 and September 2007.
3. Hometown insurance fraud … I missed all the fun.
KENT COUNTY, MICHIGAN: Grand Rapids, Michigan is known as the city of furniture and is gaining a reputation as a center for medical research. But now it has become Michigan’s Mecca for insurance fraud. Three of the top five insurance fraud cases in Michigan in 2009 were committed in Kent County.
The main case was perpetrated by a dermatologist who defrauded Medicare and other health insurers out of more than $ 2 million. He is in prison serving a 10-year sentence for double billing and a charge for work he did not perform. The doctor owned a Tudor mansion in Reeds Lake, which he tried to sell for $ 7.7 million, and was recently auctioned by the bank for $ 1.75 million.
The following case involved an 80-year-old man who paid a former employee to set his business on fire so he could collect more than $ 300,000. The third is an Alpine Township man who was sentenced in August to at least six years in prison for selling counterfeit $ 40 insurance policies to nearly 500 people.
Insurance fraud is serious business, as claims paid for fraudulent claims cost ALL of us higher premiums. It is no different than shoplifting. Stores simply add the cost of your “shrink” to the cost of the products that you and I pay for. Report any suspected insurance fraud to the police. And know that most of the time, criminals are caught.