Some people are willing to break the law in order to make a quick dollar. However, investigative staff at insurance companies are just as willing to thwart these attempts at fraud.
Since 1978, Los Angeles-based Mercury Insurance has employed its Special Investigations Unit to combat potentially fraudulent claims. Now, after uncovering thousands of fraudulent claims each year, Mercury has released its top – or bottom – three cases of fraud.
The insurer’s “best of the worse” are:
#3. Let It Burn
The insured owned a $160,000 motor home and was having trouble selling it. Conveniently, it became the target of an arsonist – setting up the insured for a major payday.
Think that sounds a bit too good to be true? So did Mercury’s SIU, which immediately began to investigate.
The arsonist, who turned out to be the insured’s next door neighbor, was severely burned during the crime and quickly arrested. SIU investigators then obtained the name of a middleman, a 22-year friend of the insured, who hired the arsonist. Prior to any interrogation, though, he died in a suspicious motorcycle accident following a night of drinking with, you guessed it, the insured.
As SIU’s investigation continued, the arsonist was handed a 16-year prison sentence. While serving time, his recorded prison phone calls implicated the insured as the architect of the crime and the ploy was exposed. The insured received a hefty prison sentence and his claim was…denied.
#2. Oscar-Worthy…Not So Much
The insured’s car lightly collided with a stationary public bus. The much larger bus didn’t budge and no damage occurred to either vehicle, though one woman onboard claimed she suffered significant neck and back injuries.
The SIU went to work investigating this injury claim and uncovered video footage of what transpired. The flop puts soccer players to shame. No surprise, her suit was dismissed by the court.
#1. A Shot in the Dark
An LAPD gang detective reported his expensive BMW was stolen from a Los Angeles-area strip mall. Police responded quickly, but became suspicious when the detective’s nephew arrived on scene seconds later to give him a ride home.
Doubts deepened when the detective suffered a mysterious gunshot wound shortly after the theft. He alleged the shooting and theft were gang retaliation for his work fighting gang crime in the city, but the real story turned out to be quite different.
LAPD and Mercury’s SIU were able to prove the detective orchestrated everything, including the shooting, in an attempt to defraud Mercury out of thousands of dollars. The investigation revealed the detective was more than $1 million in debt and he faked the carjacking to collect on his insurance policy. He then shot himself trying to bolster his disintegrating story, but later pled guilty to all charges and was sentenced to prison. His claim was denied.
“I’m continually amazed by some people’s brazen, foolish attempts to cheat the system,” said Dan Bales, Mercury’s national director of special investigations in a statement. “It’s imperative we expose unsubstantiated claims, because Mercury maintains low rates for their policy holders, in large part, by preventing phony payouts. Our SIU is the last line of defense.”
“Insurance fraud is a major concern for all insurance companies,’ says Joanna Moore, Mercury’s chief claims officer. “It should be a big concern for policyholders, too, because it can contribute up to 30 percent of the premium cost. Our SIU team assists with keeping those costs down and ultimately helps us provide our customers with lower rates.”