The insurance industry is in the business of risk mitigation, and when disaster strikes, some may see it as an opportunity to exaggerate or falsely file a claim with their insurer.
In some rare cases, individuals may even intentionally damage their property to receive a higher payout which is often referred to as opportunistic fraud.
Aside from being illegal, fraudulent insurance claims can indirectly lead to policy and premium rate increases, costing insurance providers billions over the course of a year. Keep in mind that insurance providers are still a for-profit industry, which, unfortunately, means that they wind up passing the cost of fraud onto their policyholders.
In fact, the FBI says an average American family will pay about $400 - $700 extra on their premium due to insurance fraud. Here are a few common ways that insurance fraud can happen:
“The FBI estimates that the total cost of insurance fraud (excluding health insurance) is more than $40 billion per year and insurance fraud costs the average U.S. family between $400 and $700 per year. In the late 1980s, the Insurance Information Institute interviewed claims adjusters and concluded that fraud accounted for about 10 percent of the property/casualty (PC) insurance industry’s incurred losses and loss adjustment expenses each year. Using that measure, in 2019 and 2020 PC fraud would amount to $38 billion each year. The figure can fluctuate based on line of business, economic conditions and other factors.” - iii.org
Avoid Fraud with a Public Insurance Adjuster
If you have to file an insurance claim, it is important and beneficial to provide an accurate breakdown of your property damage to help minimize fraud and receive the proper payment under your insurance policy.
Always remember that a professional, experienced and knowledgeable Public Insurance Adjuster will inspect your damage, review your insurance policy and discuss what is and is not covered under your policy.
Our team at Reliant Insurance Adjusters is dedicated to providing you with the professionalism, experience, knowledge and resources to help get you the best possible outcome for your insurance claim. Contact us today to get started.
If you own a home or commercial property, you will be required to have an insurance policy. But should you shop for an insurance policy based on the policy’s price … or the insurance coverage itself?
Oftentimes, insurance policies are an added expense, and individuals will try to cut corners by focusing on price rather than coverage. This is not necessarily the best way to shop for insurance because having quality coverage when you need it most is the primary reason to purchase an insurance policy.
When an accident occurs, the aftermath (repairs, personal injury coverage, etc.) usually exceeds the average deductible cost, while other times, the damages can cost less and may not even be worth filing a claim.
If you pay a low premium for your policy, you will likely have inadequate coverage, and you can wind up paying exponentially more when an unexpected accident or disaster occurs. However, it is possible to shop for insurance based on the policy coverage while remaining within your budget.
Shopping For Insurance Coverage
As you shop around for an insurance policy, you may be eligible for more comprehensive coverage than you anticipated.
When shopping for insurance coverage, rather than price, you should consider how much and the type of coverage you will actually need for full financial protection of your property. This can be done by assessing potential worst-case scenarios and the value of your property and belongings. For instance, if a fire occurred and caused damage to your property, what would the cost be to rebuild your property? The same holds true for water damage which can also result in large amounts to rebuild. What if cabinetry, closets, flooring and walls are damaged? This is very important to think about so you can secure the proper insurance coverage.
In order to respect your budget while focusing on coverage, consider your premium and deductible costs. A lower premium may look great at first, but it is often paired with a higher deductible, which could mean sticker shock, when it gets deducted from your insurance claim payment in the event of an insured loss. You are still responsible to make up that difference in your repair process.
Review Your Policy & Shop For Insurance Coverage
The insurance policy you choose should be based on the type of coverage you will need when you need it most. Take a moment to review your policy, either on your own or with a qualified professional. Our team at Reliant Insurance Adjusters offers a free review of your insurance policy. We can help you make sure that you do not have lower than expected policy limits, or exclusions, and determine if you may need to increase your coverage or shop for a new policy.
If possible, try to shop based on the insurance coverage rather than settling for the lowest premium possible. There are several insurance discounts and policy options available to meet a variety of budgets and coverage needs.
At Reliant Insurance Adjusters, we have seen numerous scenarios where people have selected insurance coverage based on a low premium, and when it comes time to file a claim, they have to face the reality of low policy limits, high deductibles, or no coverage at all.
If you have filed a claim and need an experienced insurance adjuster on your side, we can help. Contact us today for more information or an extensive policy review.