Fraud Detection & Prevention Flashcards

A claimant alleges total theft of a vehicle, but GPS data from the insured vehicle shows it parked at the claimant's workplace during the alleged theft window. This is an example of:

Answer: Hard fraud—fabrication of a loss

Fabricating a theft that never occurred using false statements is hard fraud, and GPS data is direct digital evidence contradicting the claim.

When an SIU investigator conducts surveillance on a disability claimant, which legal principle must guide the investigation?

Answer: Surveillance is permissible only in public spaces where there is no reasonable expectation of privacy

Surveillance must be conducted only in public areas where there is no reasonable expectation of privacy to comply with privacy laws and avoid evidence suppression.

Which of the following is a 'soft fraud' scenario?

Answer: Adding pre-existing damage to a legitimate storm damage claim

Soft fraud involves exaggerating or embellishing a legitimate claim—such as adding pre-existing damage—rather than fabricating a loss entirely.

A homeowner files a claim for water damage and lists a 75-inch television as damaged. The adjuster finds an older 40-inch TV during inspection. Which fraud indicator is present?

Answer: Misrepresentation of damaged property value

Listing a higher-value item than what actually existed is misrepresentation of property, a common contents fraud technique.

The Coalition Against Insurance Fraud (CAIF) primarily serves what function?

Answer: Advocating for anti-fraud laws and coordinating public awareness campaigns

The CAIF is a nonprofit alliance that advocates for stronger fraud laws and promotes public awareness about the costs of insurance fraud.

During a recorded statement, a claimant provides inconsistent accounts of how an injury occurred. What is the best immediate action for the adjuster?

Answer: Document the inconsistencies and refer the matter to SIU for further review

Inconsistent statements are a fraud indicator that warrants documentation and SIU referral rather than an immediate denial or acceptance.

Which clause in a property insurance policy allows the insurer to void coverage if the insured intentionally conceals or misrepresents material facts?

Answer: Concealment and fraud condition

The concealment and fraud condition gives the insurer the right to void the entire policy if the insured intentionally misrepresents or conceals material information.