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Old 11-22-2019, 01:25 PM
TotalBro TotalBro is offline
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Default Renter's Insurance Fraud

My friend who(m)? worked as a claim adjuster for a big P&C insurer said they got a lot of fraudulent claims. I asked him if they 'pressed charges' against the claimants, and he said 'never'.

Does the insurance company figure it's not worth their time, and the person will likely just choose another insurer, and therefore be their competitor's burden?

Whereas if Wal-Mart catches a shoplifter, they will want to pursue criminal charges in part to keep that person out of their store...

-TotalBro
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Old 11-22-2019, 01:34 PM
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My friend who(m)? worked as a claim adjuster for a big P&C insurer said they got a lot of fraudulent claims. I asked him if they 'pressed charges' against the claimants, and he said 'never'.

Does the insurance company figure it's not worth their time, and the person will likely just choose another insurer, and therefore be their competitor's burden?

Whereas if Wal-Mart catches a shoplifter, they will want to pursue criminal charges in part to keep that person out of their store...

-TotalBro
Walmart catches shoplifters in the act. That is the evidence.

It's more difficult when it comes to a fraudulent claim. Say a person claims he got his laptop stolen from his house, and then makes a claim.

You would have to investigate (cost), and this usually >>> cost of laptop replacement.

From the POV of the insurance company, as long as the fraudulent claims are very small (in frequency and severity), its more economical to pay them vs investigating them.
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Old 11-22-2019, 01:40 PM
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I've worked in fraud detection. The unit that is responsible for investigations within the claims department is called the Special Investigation Unit (SIU) and might only have a dozen or so people staffing it for a several billion dollar + LOBs.

Small claims tend to be ignored with bigger ones get more attention. Even then, highly suspicious claims with a lot of supporting evidence for fraud rarely make it to trial. What happens is that an investigator will call up the claimant to ask clarifying questions, and once it becomes clear the odds are against them, the claimant will drop the claim before any payments are made and the investigator will move on to the next case.
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Old 11-22-2019, 01:42 PM
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The unit that is responsible for investigations within the claims department is called the Special Investigation Unit (SIU)...
...These are their stories.

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Old 11-22-2019, 04:53 PM
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Originally Posted by TotalBro View Post
My friend who(m)? worked as a claim adjuster for a big P&C insurer said they got a lot of fraudulent claims. I asked him if they 'pressed charges' against the claimants, and he said 'never'.

Does the insurance company figure it's not worth their time, and the person will likely just choose another insurer, and therefore be their competitor's burden?

Whereas if Wal-Mart catches a shoplifter, they will want to pursue criminal charges in part to keep that person out of their store...

-TotalBro
Are you assuming that a "fraudulent" claim is automatically paid?

This isn't necessarily the case. An adjuster has the ability to simply deny a claim and that's the end of the story (unless the claimant disagrees, in which case they can opt to file a lawsuit to press their claim).

I agree with the "friend" that in the overwhelming number of cases of such activities that it's not worth the insurer's time (and potential negative PR) to press criminal charges.



BTW, what line of business is your "friend" a claim adjuster?
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Old 11-22-2019, 05:13 PM
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BTW, what line of business is your "friend" a claim adjuster?
Thread title suggests he's referring to renter's insurance, which my guess has relatively few large claims.
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Old 11-22-2019, 06:06 PM
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On the flip side, when i had a backpack full of clothes stolen from my car, Allstate asked so many "clarifying questions" (original price and date purchased of every pair of socks, for instance) that I gave up on the claim in frustration. I assume they patted themselves on the back for preventing fraud. But I've been bitter about it and badmouthing them ever since.

Last edited by Lucy; 11-22-2019 at 09:54 PM.. Reason: swypos
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Old 11-22-2019, 09:44 PM
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On the flip side, when i had a backpack full of clothes stolen from my car, Allstate asked so many "clarifying questions" (original price and date purchased of every pair of socks, for instance) that i have up on the claim in frustration. I assume they passed themselves on the back for preventing fraud. But I've been bitter about it and badmouthing them ever since.
A different large insurer had my renter's policy some time back. I was living in a high-floor apartment hundreds of feet above the street. I had a flood claim. Loss of use required that they put me up in a "like kind and quality" hotel (not five star, but probably four) for a month. I estimated that they lost almost a thousand years of expected profits on my policy on that claim. Filed the claim and told them where I planned to live --- they approved it, no trouble. They paid for my damaged items also. I've been with them every since even though other companies are cheaper (in so many ways).

Mutual insurers are the only way to go.
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Old 11-22-2019, 10:32 PM
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On the flip side, when i had a backpack full of clothes stolen from my car, Allstate asked so many "clarifying questions" (original price and date purchased of every pair of socks, for instance) that I gave up on the claim in frustration. I assume they patted themselves on the back for preventing fraud. But I've been bitter about it and badmouthing them ever since.
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Old 11-22-2019, 10:35 PM
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On the flip side, when i had a backpack full of clothes stolen from my car, Allstate asked so many "clarifying questions" (original price and date purchased of every pair of socks, for instance) that I gave up on the claim in frustration. I assume they patted themselves on the back for preventing fraud. But I've been bitter about it and badmouthing them ever since.
This is done on purpose. Not just to discourage fraud, but to discourage people in general when it comes to making a claim.
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