Why Insurance Carriers Think Claims Are Fraud and Aren’t Paying Out Insurance Claims

Property Insurance Claim Denied - Next Steps

Insurance carriers may be reluctant to pay out insurance claims for several reasons. With the cost of insurance fraud estimated to be around $40 billion each year, quickly catching fraudulent claims is a top priority for them. However, being extra cautious can also sometimes lead to delays and unforeseen obstacles in the property damage insurance claims process.

Three Potential Indicators of Fraudulent Claims

So, what are the indicators that would cause insurance carriers to be suspicious about a potentially fraudulent claim? When you submit a property damage claim, there are a few things your insurance company will evaluate that could get your insurance claim denied.

1. Your Past Claims 
If you have submitted several property damage claims in the past, a property insurance claims adjuster will likely dig deep into your history. If they notice patterns in the types of property damage insurance claims you submit or how often you claim a damage or loss, your latest claim may be denied.

2. Your Wider Claim History
Fraudsters often target more than one insurance company in the hopes of attracting less attention. Therefore, as an extra precaution, insurers check data beyond their internal fraud detection systems. For example, some systems enable adjusters to match new claims to those that were part of earlier or multiple other claims. They can also reveal other red flags like special investigations unit activity. 

3. Suspicious Loss Indicators 
How Stuff Works, lists several Suspicious Loss Indicators that claims adjusters watch out for, including:
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• Submitting handwritten receipts for repairs on a covered item
• Adding or increasing homeowners or auto insurance coverage shortly before submitting a claim
• Experiencing financial distress, especially if you make a property damage claim shortly after the start of your policy

• Missing police reports and altered documentation 
• Delayed reporting of a property claim

 
While not every claim matching those criteria is fraudulent, insurance claims adjusters may still want to take a closer look. 

How Fraud Detection Works

There are several analytical tools available that alert property claims adjusters to potential cases of fraud based on varying Suspicious Loss Indicators. Additionally, Special Investigations Units, private detectives, and even social media may all be used for the detection and prevention of insurance fraud. 
 
If any discrepancies come to light during the investigation process (even if they really are coincidental) it may be challenging to get your insurance company to cover your claim.

Was Your Property Insurance Claim Denied?

Has your insurance company denied your claim, mistakenly deeming it suspicious? Your past claims with that specific carrier, your wider claim history, or even having one of the Suspicious Loss Indicator boxes checked could be to blame.
 
Settling insurance claims is now, more than ever, a tedious and complex process. At Reliant Insurance Adjusters, we can help you through the complicated claim process and help you recover financially from your loss. Contact us today to schedule a no-obligation consultation and learn more about how we can help you.