One of the easiest ways for insurers to catch crooks is via a basic cross-check. All this involves is looking for simple patterns in the checks they're sending out to pay claims. If the same person is receiving numerous checks, that's a warning sign. So is the payment of several big claims to the same address, even if the name on the check is different. It's not rocket science, but it works [source: Khalfani-Cox].
Cross-checks aren't limited to an insurer's database, either. Thousands of insurance companies, self-insured entities and third-party administrators report all of their claims to ISO ClaimSearch, an anti-fraud information system. The system was created by Insurance Services Office, Inc., and covers auto, property and liability claims. Cross-checking a new claim against all of those in this database (+100 million) makes it easier to sniff out staged-accident rings, finger those submitting multiple claims for the same loss and other scams [source: Ashtabula Insurance].
Author's Note: 10 Ways Insurance Agents Spot Fraudulent Claims
Several years ago, I worked for an insurance company. That was when I learned insurers employ special teams of people whose sole job is to ferret out fraud. I was shocked. I had no idea insurance fraud was so prevalent. And when writing this article, I was further shocked to discover some of the more dramatic means people employ to commit fraud. Staging car accidents? Faking the existence of a luxury car that gets stolen? Luckily, insurers are fighting back. And we need to be vigilant, too -- because our premiums are on the line.
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