CAIA Fraud Detection and Prevention in Auto Claims 1 — Questions and Answers
Question 1: Which of the following is a common red flag indicator of a staged auto accident?
- Multiple claimants with the same attorney (Correct answer)
- Minor vehicle damage with only one claimant
- Claim filed within 24 hours of the accident
- Vehicle has a clean title history
Correct answer: Multiple claimants with the same attorney
Multiple claimants represented by the same attorney is a classic indicator of a staged accident ring.
Question 2: What type of auto insurance fraud involves a policyholder intentionally causing damage to their own vehicle to collect a claim?
- Opportunistic fraud
- Soft fraud
- Staged collision fraud
- Owner give-up fraud (Correct answer)
Correct answer: Owner give-up fraud
Owner give-up fraud occurs when a policyholder deliberately destroys or abandons their own vehicle to collect insurance proceeds.
Question 3: An adjuster notices the claimant's medical bills were submitted from a clinic that opened one week after the reported accident. This is most indicative of:
- A legitimate new medical facility
- Possible medical billing fraud (Correct answer)
- Delayed treatment patterns
- An unrelated injury claim
Correct answer: Possible medical billing fraud
A medical facility opening immediately before or after an accident and submitting related bills is a strong indicator of fraudulent billing schemes.
Question 4: Which database is commonly used by U.S. insurance adjusters to detect prior claim histories and potential fraud patterns?
- CARFAX
- ISO ClaimSearch (Correct answer)
- NICB WatchFile
- CLUE report
Correct answer: ISO ClaimSearch
ISO ClaimSearch is an industry-wide database that allows insurers to check a claimant's prior claim history across multiple carriers.
Question 5: What is 'soft fraud' in the context of auto insurance claims?
- Fabricating an entirely false accident
- Exaggerating a legitimate claim to recover more money (Correct answer)
- Filing claims under a stolen identity
- Colluding with a repair shop to inflate estimates
Correct answer: Exaggerating a legitimate claim to recover more money
Soft fraud, also called opportunistic fraud, involves padding or exaggerating a real claim rather than inventing a fictitious one.
Question 6: When an adjuster suspects fraud, the appropriate first step is to:
- Deny the claim immediately
- Confront the claimant directly
- Document suspicions and refer to the Special Investigations Unit (SIU) (Correct answer)
- Close the file and report to state police
Correct answer: Document suspicions and refer to the Special Investigations Unit (SIU)
Suspected fraud should be documented and escalated to the carrier's Special Investigations Unit (SIU), which is trained to conduct fraud investigations.
CAIA Fraud Detection and Prevention in Auto Claims 1
Which of the following is a common red flag indicator of a staged auto accident?