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Fraud Investigators: The Police Detectives of Insurance

Written by Michele Wilmonen. Posted in Definitions Last Updated: 11/17/2015

Fraud investigators are essential to the prevention of fraudulent insurance activity.

Fraud Document on an Investigators Desk

Insurance fraud is a fraud investigators main focus.

Insurance fraud is sometimes regarded as a victimless crime. This means that the crime is not directly violating the rights or endangering any particular person (victim).

This definition of insurance fraud does not exactly stand if you consider the repercussions of insurance fraud. The amount paid out to people that commit insurance fraud and the money that has to go into finding and persecuting these criminals are funneled out to all of us in increased insurance premiums.

This makes all of us victims of insurance fraud and is why fraud investigators are important to the industry and to all of us that have insurance.

What Are Fraud Investigators?

Fraud investigators work directly for insurance companies or for the state insurance commissioner’s office (or department of insurance) researching questionable insurance activity. This activity can be anything ranging from the most common fraud of fake insurance claims to premium being stolen. The concentration of a fraud investigators case can be a fellow employee of the insurance company, an agent, a claimant and even the insurance company’s own clients.

Why do we Need Fraud Investigators?

We need fraud investigators to help catch the criminals that commit insurance fraud and also to stop insurance fraud before it is too late. In the case of fraudulent claims, a fraud investigator can help prevent a fake claim from being paid out. They can also prevent too much from being paid out on an exaggerated claim.

If a fraud investigator can prevent the money from being paid out by the insurance company, the insurance company won’t have to raise premiums for the people insured with them to recoup the loss. The less that we have to pay out because of other people’s criminal activity should be good news for all of us that have to pay insurance premiums.

Fraud investigators also investigate fraud that may be happening with insurance premium. Situations like agents that are keeping premium instead of passing it on to the insurance company for their client’s coverage. They also investigate clients that lie about where they live to get cheaper insurance rates. Nothing in insurance is safe from fraud which is why insurance investigators work with just about every department of an insurance company.

A Dangerous Job

On June 7th, 2011 two fraud investigators in the state of Louisiana were killed while trying to obtain documents from an agent that was the focus of a premium fraud investigation. The agent that was under investigation, for stealing his client’s insurance premiums, shot and killed both unarmed fraud investigators before killing himself.

Being the main focus of an insurance fraud investigation is as unwelcoming as being the main suspect of a police investigation. People that find themselves in this position act out defensively and sometimes cause injury to the investigators or damage to their vehicles. People show less restraint of their bad intentions with fraud investigators than they would a police officer and unfortunately fraud investigators have to do their job unarmed…..at this time.

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Michele Wilmonen

Michele’s first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she’s earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

Reviews (4)

  • Michelle

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    My son was driving in front of a girl who was driving weird and started to move over when she slammed on her brakes for no reason. My son barely hit her she cave him no drivers license,no insurance info and now is saying she was hurt. Our damage on our car is 220.00. She has done this 3 other times in 2016. She said she was hurt evertime. What can I do to prove insurance fraud?

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    • Michele Wilmonen

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      If you have proof that she has had other similar accidents provide that information to your claims adjuster so they can refer the case to the company’s fraud investigation unit.

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  • Tony

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    I am interested in becoming an ins fraud investigator, I am a prior police detective . Any advise?

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    • Michele Griffin

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      First, learn as much as you can about insurance.

      Second, start looking for open fraud investigator positions at different companies. The position listings will tell you what qualifications they are looking for and will give you an idea of what other training you may need, or if you have enough experience to start applying immediately. Also starting out as a claims adjuster and then working your way into the fraud department is a good way to go as well.

      Reply

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