A staged insurance loss is a fictitious loss created for the sole purpose of defrauding an insurer. Wherever insurance exists in the world there is insurance fraud. It is an equal opportunity crime performed by every race, religion, language spoken or national origin.
The number of variations on types of staged losses is limited only by the imagination of the insurance criminals.
Staged water damage or mold claim
Not all staged losses deal with automobiles. Real and personal property can be the victim of a staged loss.
Mold and fungi can be destructive and unhealthy. It can also create a major insurance claim for a person anxious to defraud an insurer. The fraud perpetrator first acquires an old, inexpensive dwelling which is then insured for full replacement cost. They turn the heat up to maximum and then soak the interior with hoses or interior water sources. The high humidity and heat are sufficient to start the growth of mold and fungi. The insureds wait a week or two, allowing the mold to grow and then report a claim to the insurer saying they returned from a short two-week holiday to find the mess. The house is usually extensive and can result in a total loss. The insurer repairs or replaces the dwelling and the fraud perpetrators sell the house at a profit.
Public hysteria about mold
When the 21st century began, public hysteria about mold grew. As insureds and their representatives became knowledgeable about mold, the temptation to create a covered loss scenario where none would otherwise exist became almost irresistible.
It is important, therefore, for an adjuster to confirm the actual existence of the broken pipe, ruptured hot water tank or other covered cause of loss before adjusting a mold damage claim. Furthermore, during this early adjustment period, corroborating information should be obtained from plumbers, repairmen and dry-out companies that the loss occurred as claimed, and that the water intrusion appeared in areas that are now claimed to be ruined by mold.
Insurance fraud is a serious crime
Fraud perpetrators should face prosecution and jail and, at the least, an inability to recover from the insurers. Insurance adjusters and insurer fraud investigators must conduct a thorough investigation, recognizing that most police agencies are not interested in insurance fraud. The thorough investigation, conducted to defeat the fraudulent claim, can then be packaged for the police and prosecutors who will prosecute, since much of their work has been completed. If convinced that fraud has been perpetrated, the insurer should seriously consider presenting their cases to the local prosecutor. Staged accident perpetrators who in the past understood that if they were caught faced no more than an order of restitution and probation, must be convinced that they will face hard time in prison if caught.
No matter how the loss is staged, if it was done to deceive and defraud an insurer it is a crime in almost every jurisdiction in the world where insurance is sold. When the fraud is prosecuted successfully, those tempted to commit fraud will be deterred.
Insurance fraud is a serious crime taking billions from the insurance industry every year. Everyone who buys insurance must understand that if fraud is defeated or reduced they could save from 10 to 30 percent of the premiums they pay.
Superior Restoration and Construction – www.kcsuperior.com – are experts at smoke, fire, mold, and water clean up and restoration located in Kansas City. Serving the Greater Kansas City area, Superior Restoration and Construction have been restoring property damage and doing apartment renovations since 2014.