Texas Department of Insurance

Staged or caused accidents, may involve one or more vehicles and individuals causing a collision with an innocent driver who ultimately appears to be at fault.

• Swoop -  "Swoop" vehicle swerves in front of "squat" vehicle causing "squat" vehicle to slam on its brakes, which causes a rear-end collision with the victim's vehicle.
• Sudden Stop - "Squat" vehicle slows down to close gap between his or her vehicle and the victim's vehicle, then brakes suddenly causing a rear-end collision with victim.
  Backing - Victim's vehicle collides with suspect's vehicle while backing out of a driveway or while backing out of a parking space in a parking lot.
  Right of Way - Suspect driver appears to give right-of-way to victim driver, usually in an intersection, causing vehicles to collide; suspect later claims no right-of-way was offered.
• Phantom Vehicle - Solo vehicle crashes due to vehicle of unknown origin/description.
• Hit and Run - "Hit and run" vehicle strikes victim's car and leaves scene of the accident.

Paper accidents, the accident only exists on paper.  A vehicle may have pre-existing damage which is claimed as occurring during the purported collision.  Parties conspire to create illusion of legitimate accident using either pre-damaged vehicles or by intentionally and covertly inflicting damage on the suspect's vehicle(s). Generally, law enforcement is not called to the scene of the accident.

Faked and or Inflated Damages, damages to vehicle exaggerated, non-existent, inflated, pre-existing or vehicle damaged at a later point in time.

Organized Claim Fraud Ring, collision(s) orchestrated by organized criminal activity involving attorneys, doctors, other medical professionals, office administrators and/or runners and cappers.

Exaggerated injury claims, these may result from a staged or caused collision or a fabricated accident at retail establishment.

Owner give-up, vehicle owner makes a false report that their vehicle was stolen in order to recover insurance money.

Premium Theft, the single most prevalent type of agent misconduct Instances can range from a single theft of minimal amounts to multi-million dollar scams perpetrated on the public and the insurance industry.

Health care fraud, medical provider’s bill insurance companies for services not rendered or unneeded tests and procedures.

• Provider Fraud, Medical provider knowingly submits false medical bills by billing for services not rendered, billing for wrong procedure codes or billing for procedures of a medical necessity when procedures may have been elective or cosmetic in nature and not covered by health insurance
• Identity Theft - Using another's identity to secure health care benefits.
• Pharmacy -  Pharmacy inflates bills or falsifies codes.
• Surgery Center Fraud - Any alleged fraudulent activity (billing fraud, etc.) pertaining to outpatient surgery centers.
• Disability - Disability claim submitted against disability insurance policy while claimant on permanent or temporary disability and receiving continual benefits and/or vocational benefits and/or claimant reported working or performing activities exceeding alleged physical limitations.
• Inflated Billing - Inflated billing by any medical facility, doctor, chiropractor, laboratory, etc.
• Pharmacy - Pharmacist or pharmacy inflates bills or falsifies billing; person illegally obtains medical prescriptions and submits prescriptions for habitual need.
• Dental - Dentist or dental office inflates bills or falsifies billing codes.

Padding or inflating an insurance claim, may involve any type of insurance but most commonly occurs with homeowners and auto claims.  Generally, these are legitimate claims where additional lost property or damages are reported to increase the claim or offset the insured’s deductible.

Senior Citizen Abuse – Fraud, agents and insurers concentrate their marketing efforts on senior citizens.  Agents and insurers may abuse their senior citizen customers by overselling, misrepresenting and selling unneeded or even inappropriate insurance products to them.  The conduct may at time even be criminal.  The most common types of abuse and fraud schemes involve marketing annuities, life and health insurance.

Unauthorized or Phony Insurance Companies – A type of scheme that runs the gamut of selling what appears to be an insurance policy or contract. This includes everything from phony insurance cards to offshore insurance companies issuing policies they have no intention of honoring and low cost health insurance plans.

Workers' Compensation

• Claimant Fraud - Suspicious employee applicant claim, working and drawing benefits.
• Legal Provider - Legal provider inflates billing or materially misrepresents the facts.
• Medical Provider -  Medical provider inflates billing, knowingly submits bills with improper medical codes and misrepresents facts.
• Pharmacy - Pharmacy inflates bills or falsifies codes.
• Misclassification - Misclassifying the type of workers to obtain workers' compensation coverage at a lower premium. (Example: classifying roofers as clerical, etc.)
• Under Reported Wages - Misrepresenting payroll to obtain workers' compensation coverage at a lower premium. (Example: Over-reporting wages as if employees are experienced journeyman with less likelihood of injury and thus allowing for lower premiums or under-reporting payroll to keep premiums lower.)

These are just a few instances of criminal insurance fraud. In most cases, when a person commits insurance fraud they will also have committed other criminal acts, such as falsifying documents and theft.

HOW CAN YOU AVOID BEING A VICTIM OF INSURANCE FRAUD?

When Buying Insurance

• Ensure the company is licensed.
• Beware of unsolicited offers or offers to upgrade coverage.
• Beware of unreasonably low premiums.
• Beware of investments that are too good to be true.
• Be sure you receive the policy within 60 days
• Protect your insurance policy numbers.

When Filing a Claim

• Review your medical bills.
• Review all Explanation of Benefits.

When Driving

• Look beyond the vehicle in front of you.
• Allow ample space between your vehicle and the vehicle ahead of you.

If You Are In a Collision

• Call the police.
• Count the number of passengers in the other vehicle
• Get all the names and telephone numbers of individuals involved.
• Carry a disposable camera and take pictures.

• Report all suspected fraud crimes to Texas Department of Insurance Fraud Unit. Online Fraud Reporting
• Learn about fraud schemes and protect yourself against fraudulent acts.
• Make sure the information you provide to your insurer is accurate.

*Information provided by the National Insurance Crime Bureau (NICB)

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