One of the greatest challenges insurance companies face is the ferreting out of insurance fraud. Wherever there is a chance that someone can get paid for submitting a fraudulent claim, there are also stupid people who are willing to give it a try.
Here are some recent examples:
1. Fire, Brimstone and the evil Church Music Director
KANSAS CITY,KANSAS: A church music director hatched an elaborate plan to torch the church where he worked.
Carva Lee White of Kansas City, Missouri, planned to convince the pastor to make an insurance claim, collect the money and then help White inflate repair bills and embezzle money from Church Mutual Insurance Company.
White actually set the fires inside the church on Halloween, 2008. The church, Missionary Baptist Church, received over $110,000 for the fire repairs. White is serving a 20-40 year sentence.
2. Conniving Contractor Bribes an Adjuster
SEATTLE,WA: Federal prosecutors filed fraud charges against Donald Chill, a disaster contractor, alleging insurance fraud of over $3.2 million.
Seems Chill bribed an adjuster to submit wildly inflated estimates for damages that Chill collected from Mutual of Enumclaw Insurance.
When challenged on prices, Chill created second estimates from nonexistent contractors and submitted them as “proof.”
The trail has not yet been completed.
3. With friends like this....
GARNER, NC: Kimberly J. Smithson was charged with larceny, breaking and entering, filing a false report and insurance fraud. Smithson stole jewelry worth over $14,000 from the home of a friend whose house she was watching. She also submitted a false claim to Assurant Insurance for electronics that she was paid for. Finally, she was found to have collected on a fire set at her home, which paid her over $9,000 for damages.
She awaits trial.
Insurance fraud is serious business, since claims paid on fraudulent claims cost ALL of us higher premiums. It’s no different than shoplifting at a retailer. Stores simply add the cost of their “shrinkage” to the cost of the goods you and I pay for.
Report any suspected insurance fraud to the police. And know that most of the time, criminals get caught.