Bureau of Investigation - Insurance Fraud Unit

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Disaster Fraud

• Be aware of staged accidents, such as intentional sideswiping or cars that cut in front of other vehicles, forcing collisions due to quick stops.
  
  
• Be aware of individuals that try to get you to leave the scene of an accident without calling police or obtaining a police report.
  
  
• Be aware that some individuals report damage as vandalism in an attempt to cover deliberate or previous damage to one's own property.
  
  
• Be aware of individuals making a false stolen vehicle claim to cover previous damage to a vehicle or to dispose of the vehicle.
  
  
• Be aware of individuals that inflate genuine claims to cover a policy deductible.
  
  
• Be aware of attempts to convince you that "everybody is getting rich" so you may as well try to get additional money also.
  
  
• Be aware of the possibility that someone may set a small fire in their home to obtain a new paint or remodeling job.
  
  
• Be aware of individuals that fake an on-the-job injury to stay off work after healing to collect Workers' Compensation benefits.

• 31% of the Louisiana’s households have flood insurance.
   
• Flood insurance policies have increased 25% in Louisiana in the past year, to 495,200 policies.
   
• 20 to 25% of all flood claims occur outside of the floodplain, in low to moderate flood risk areas.
   
• Louisiana’s close proximity to the Mississippi River and Gulf of Mexico, as well as the 50 rivers, streams and bayous in the state, leave many of our 1.6 million households at an increased flood risk.
   
• In the last 10 years, Louisiana has experienced 11 flood-related, federally declared disasters.
   
• There is a 26% chance of experiencing a flood during the life of a 30-year mortgage, compared to a 9% chance of fire.
   
• Losses due to flooding are not covered under typical homeowners and business insurance policies.
   
• Over the past five hurricane seasons, from 2002-2006, insured flood losses in Louisiana totaled more than $13.4 billion.
   
• Approximately 96% of flood insurance claims in Louisiana have occurred during hurricane season over the past 10 years.
   
• Some of the most damaging floods after a hurricane occur hundreds of miles from the coast.
   
• Homeowners can purchase a flood insurance policy that offers a maximum of $250,000 coverage on the building and $100,000 coverage for contents. However, excess flood insurance coverage can be purchased for properties that need to be insured at a higher value.
   
• Renters and lessees who meet underwriting criteria are eligible for contents-only coverage.
   
• There is typically a 30-day waiting period before a flood insurance policy takes effect.
   
• The Atlantic hurricane season starts June 1 and runs through November 30.
   
• The Atlantic hurricane season typically peaks between August 1 and late October.
   
• The 2007 Atlantic hurricane season will be active with 13 to 17 named storms, 7 to 10 of which are expected to become hurricanes, according to the National Oceanic and Atmospheric Administration (NOAA).
   
• Of the 7 to 10 hurricanes forecast, 3 to 5 will be major ones of Category 3 or higher, with winds over 111 miles per hour, according to the NOAA annual forecast.
   
• Hurricane Katrina: $16.7 billion in Louisiana insured losses; Over 720,000 claims filed.
   
• Hurricane Rita: $2.6 billion in Louisiana insured losses; Over 201,000 claims filed.

• Increasing the claim to cover the deductible - 40%
• Increasing the claim to cover the premiums paid - 36%
• Including defective or obsolete appliances on a lightning claim - 29%
• Listing adults as main driver of a car being driven by an under age driver - 20%
• Omitting accidents/tickets from an insurance application - 14%
• Continuing medical treatment to increase the value of a claim - 11%
• Pretending a hit-and-run accident occurred to submit a claim - 7%
• Abandoning a car and reporting it stolen to the insurance company - 6%
• Reporting an injury at home as work related in order to collect workers' compensation benefits - 10%
• Cooperating with lawyers, doctors or chiropractors to file false or exaggerated workers' compensation claims to get money from insurers - 17%

• The employee's injuries are not consistent with the employee's job classification or the nature of the business.
• The employee states that his/her employer is other than what is listed on the claim form.
• The employee disputes information supplied by the employer on the first report of injury.
• The employee disputes the average weekly wage due additional income (i.e., cash, per diem, and/or 1099 income).
• There are cross-outs and erasures on the injury forms.
• The employer refuses to cooperate in the claims investigation; refuses to provide employee with claim form.
• Employer's witnesses to the accident are generally management personnel.
• The employer is routinely cited for safety violations.
• Employer paying medical bills and not reporting injuries.

• Employee is disgruntled, soon-to-retire, or facing imminent firing or layoff.
• Employee takes more time off than the claimed injury seems to warrant.
• Employee is new on the job.
• Employee is experiencing financial difficulties and/or domestic problems prior to submission of claim.
• Employee is unusually familiar with workers' compensation claim handling procedures and laws.
• Employee has several other family members also receiving workers' compensation benefits or other "social insurance" benefits, i.e. unemployment.
• Surveillance or "tip" indicates that the totally disabled worker is currently employed elsewhere.
• Employee comes to office for delivery of benefit checks, avoids use of US Mail.
• Employee cancels or fails to keep appointment, or refuses a diagnostic procedure to confirm an injury.
• Social Security number provided does not belong to employee.
• Employee refuses or cannot produce solid or correct identification.

• Claimant has prior accidents of similar circumstances.
• Claimant has multiple past claims with same attorney.
• Claimant is unemployed.
• Lack of familiar or personal relationships between occupants of claimant vehicle.
• Inconsistencies in multiple claimants' versions of seating in vehicle, why claimants were in vehicle, and destination of claimants.
• Claimant demonstrates familiarity with claims process and claim evaluation.
• Presence of an overly enthusiastic witness at the accident scene.
• Claimant has recently purchased vehicle, and/or insurance.
• Victim is usually female or elderly.

• Insured is overly pushy for a quick settlement.
• Insured handles all business in person, thus avoiding the use of the mail.
• Losses are incompatible with insured's resident, occupation and/or income.
• Losses include a large amount of cash.
• Insured is willing to accept an inordinately small settlement rather than document all claims losses.
• Buildings and/or contents were up for sale at the time of the loss.
• Suspiciously coincidental absence of family pet at the time of fire.
• Building and/or business was recently purchased.
• Building is in deteriorating condition and/or lacks proper maintenance.
• Fire scene investigation reveals absence of items of sentimental value; e.g. family Bible, family photos, trophies.
• No police report or an over-the-counter report in situations where police would normally investigate.
• Insured's loss inventory differs significantly from police department's crime report.

• Insured declares extensive losses without physical evidence, photographs or documented receipts.
• Items claimed to not match claimant's lifestyle, decor, house, occupation or income.
• Lack of carpet indentation from alleged large furniture or appliances.
• Insured is overly pushy for quick settlement.
• Investigation reveals absence of family photographs, heirlooms or items of sentimental value.
• Affected area was not evacuated.
• No other homes were damaged or destroyed in the affected area.
• Insured claims items were new.
• Insured can't properly describe items as to function or features.
• Insured property was not located in major damaged area.
• Property was in poor condition prior to loss.
• Insured cannot produce damaged item(s) for viewing.
• Insured claims unrepaired damage from a previous disaster.

• Unbelievable interest rate offered on investment. If it seems "to good to be true". . . it probably is.
• An agent or other representative urges you to pay with cash.
• A salesperson urges you to cash in your certificates of deposit (despite the interest penalty) and put the money into investments, annuities, or life insurance policies.

• Insured has lived at current address less than six months, or been with current employer less than six months.
• Insured does not have a telephone or is difficult to contact.
• Insured is unemployed.
• Insured claims expensive contents in vehicle at the time of theft.
• Insured is behind in loan payments on vehicle and/or other financial obligations.
• Insured has a previous history of vehicle theft claims.
• Vehicle was recently purchased.
• Vehicle has a history of mechanical problems or is a "gas guzzler".
• Vehicle has incorrect VIN, or VIN is different than VIN appearing on the title.
• Vehicle is recovered with seized engine or blown transmission.
• Vehicle is recovered stripped, burned, or has severe collision damage within a short duration of the time after loss allegedly occurred.
• Loss occurs within one month of issue or expiration of the policy.
• Coverage was obtained via walk-in business to agent.
• Coverage is for minimum liability with full comprehensive coverage on late model and/or expensive vehicle.
• Police report has not been made by insured or has been delayed.
• License plate does not match vehicle and/or is not registered to insured.
• Salvage yard or repair garage takes unusual interest in claim.