The Fraud Excuse

Two insurance companies in Florida are in liquidation due to their insolvent financial condition.  Among the reasons for their downfall quoted in a recent article about their situation, “…roughly $4 million in losses due to being the target of ‘several fraud rings’ preying on personal injury protection coverage in its commercial auto line.”

North Las Vegas Fire Captain Indicted on Arson Charges

Still think owner give-ups aren’t a problem?  Even members of the fire department are burning their cars to get out from under their loans.  Gary V. Stover, a Captain with  the North Las Vegas fire department allegedly faked the theft of his Toyota Sequoia and his insurance company paid off his $35,000 loan – including $12,000 of negative equity.  An accomplice helped Stover and provided an alibi.  Means.  Motive.  Opportunity.

Arson Awareness Week: May 3rd – 9th

The United States Fire Administration (USFA) is sponsoring Arson Awareness Week with a theme of Arson for Profit, in conjunction with the ATF and the International Association of Arson Investigators (IAAI).  According to the Insurance Information Institute, arsonists destroyed nearly $900 million in insured property and killed 295 civilians nationwide in 2007.  With skyrocketing foreclosures and a sagging economy, arson for profit is a major concern.

The USFA website offers up a great media kit (pdf) and other helpful resources.

For insurance claim personnel, law enforcement, SIU investigators, or other individuals who may investigate suspicious fires, the IAAI training website CFItrainer.net is a great training resource.  They have a series of professionally edited training videos which provide students with a solid foundation in fire investigation techniques.  Registration is required but free.  

And of course, any discussion about fire  investigation should refer folks to the National Fire Protection Association guide for Fire & Explosion Investigations – commonly referred to as NFPA 921.

Auto Dumping on the Rise

According to the Coalition Against Insurance Fraud, the New York Alliance Against Insurance Fraud issued a report this week detailing a 35% increase in so-called “owner give up” frauds where a car owner arranges to have a car stolen and destroyed – often by fire or by dumping the vehicle in a lake or river.  Fraud investigators across the industry saw a spike in these scams -particularly with high-end SUV’s – when gas prices skyrocketed.  But now with the deterioration in the economy over the last few months, it seems the trend may continue.

Analysis Paralysis

It seems as though there are an ever-increasing number of companies billing themselves as purveyors of data analysis software – particularly for purposes of intelligence analysis and fraud investigation.  Companies like SAS, i2, Centrifuge Systems, Chiliad, Aster Data Systems and Tableau Software – just to name a few – have all crossed my radar recently.  It’s interesting to watch these companies branch out.  It seems that many of the got their start as academic projects or government funded/targeted corporations but they are now expanding into the private sector with gusto.  With all these tools to choose from, I think I need a tool to help me select one.  But, I’m all in favor of competition.  Let the games begin.

Underwriting Fraud on the Rise

This month, the Coalition Against Insurance Fraud noted that underwriting fraud is responsbile for $16 Billion per years in losses according to a recent study by Quality Planning Corp.  Rate evasion and other underwriting scams often go unchecked by insurers and regulators although more and more jurisdictions are making it a crime.  It’s likely that we’ll see insurers and state Departments of Insurance crack down on this type of fraud in the future, as it continues to add risk to carriers and drive up the cost of insurance for all consumers.