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LSVI Accidents: An Automatic Fraud Flag

Written by Michele Wilmonen. Posted in Research Last Updated: 07/24/2011

An accident is categorized as an LSVI when the injuries are more serious than the damages to the vehicles, leading the insurance company to think fraud.

A Lady wih a Potential LSVI Fraudulant Claim

The history of exaggerated and fake injuries with an LSVI is why the fraud department is automatically notified when these types of claims are reported.

There are just some insurance claims that make an insurance employee immediately think of one word – fraud. Claims where the person’s vehicle was found at the bottom of a lake, but there was no police report that it was stolen and the insured claims not to know how it got there, brings the fraud word to mind. Injuries for multiple people in a small car all treated by the same doctor for an accident that has no police report or other party involved also begs for the fraud word. Out of all the possible fraudulent claims though, the one that is the most frequently reported is the LSVI accident.

What is an LSVI?

A LSVI is just the insurance industries internal word for Low Speed Vehicle Incidents.  These are accidents that happen at a low rate of speed and there is hardly or any damage to the vehicles that were involved in the accident. What automatically flags these types of accidents for the fraud department is not what happened in the accident itself, but the result.

With these accidents, people claim to have serious injuries that should not be seen with this type of accident. Injuries such as: sprains, pulls, strains and soft tissue injuries. Whiplash being the most common of these injuries that are claimed. Conveniently, these types of injuries cannot be recorded with a machine by any doctor, like a broken bone or other serious injury can. Meaning that there is no evidence other than what the person is complaining about to the doctor and the doctor’s diagnosis from an exam and taking the patients word for it.

Are All LSVIs Fraud?

No, not all LSVI accidents are fraud. There are some very legitimate injuries that can happen as a result of an LSVI accident. The limited damages to the vehicles may be a result of a well-made car or the way that the vehicles hit each other. Injuries can also happen very easily to people that are fragile, already have injuries that were just exacerbated by the accident or to minor children and the elderly.

Are LSVI Fraud Criminals Stopped?

Yes, some LSVI fraud claims are caught by fraud investigators before any money is paid out to the people trying to collect on the claim. Then the wheels are set in motion to charge them with insurance fraud. Catching people in a fraudulent claim early is the result of vigilant claim CSRs and claim adjusters that have worked on the case.

However, there are times when the claim is paid out before catching the fraud. In cases like these the insurance company then goes after the criminal through legal recourse to get their money back and to file charges. Other times, the fraud is not caught or the insurance company is not able to find enough evidence to accuse the person of fraud. In cases, like these, the criminals get away with committing fraud through a LSVI.

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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.

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