Insurance is a quite easy target of scams. Many insurance company become fraud victims with total amount up to billions dollars per year. With this condition, they make a preventive step by increasing premiums to cover "fraud cost". Increasing premium is not ultimate solution to prevent scams. Therefore, they have fraud detection departments which is in charge for preventing fraud and calculate money paid out for false claims. False claim and excessive risk which is not proportional with premiums are categories of insurance fraud. Both categories could make the insurance company collapse, however the excessive risk is the most dangerous for insurance company. If clients give false information when applying for an insurance, they will pay premium less than they have to pay. When they file claims, insurance company have to pay higher than they should be. Insurance companies have many ways to prevent fraud and collect data accurately.

Surveillance

In health insurance or disability insurance case, the insurance company can monitor their clients directly. When the client file a claim, they have to fill form, this form record the document about their activity after the illness or accident. Insurance company may install surveillance camera video, review the claims from it and compare with the client's form. If the clients falsify the illness or disability, the payouts will be stopped. 

Whistle Blowers

Insurance company can gather information from third parties. They usually provide the whistle-blowers number for anonymous calls. Whistle blowers are legal and protected by law. Individuals can call hotline numbers to report what they know about the potential insurance scams. Not only insurance, whistle blowers are commonly used in any areas. Government and general business use whistle blower to get information from society about certain issues. 

Claims History

The clients' claim history is one of useful tool for insurance company to examine potential fraud. Insurance company will terminate coverage contract if clients' surpass a certain number of claims. This step is taken to protect insurance company from huge losses. 

Investigating

Generally, insurance companies have insurance investigators to review and analyze any claims that seems particularly high. They will inspect the situation to gather more evidence in claims investigation.

Giving false information when file claims seems tempting, but fraud is a crime. Getting thousand dollars from insurance fraud are not worth with the consequences you can get. Giving false data when applying for an insurance is also a fraud and you might get penalty as well. 

The basic of auto insurance is auto insurance company make money when the insured don't involved in accidents and/or don't file claims, but if the opposite happens, they will lose money. Therefore, auto insurance company have to calculate and predict driver risk factor accurately. The insurers will charge you raised premium to avoid increased payout.

New Car

New car is an asset which worth more money than older model, so it will cost more to replace. If you lease a new car purchase, most lenders require you to carry full coverage at a stated level. Keep in mind that not only flashy sports car or other high-priced model which will increase your premiums. Certain car model like Honda Civic could spike your premiums as well because it most stolen models in the United States.

Increasing Commute

Long commutes can boost your auto insurance premiums. It's not only cost you time and fuel, but also risk to get into accidents during rush hour. Especially if you have a profession with frequent driving, the risk of an accident is big. So, auto insurance company will likely increase your rates.

Residency

City residents have more accidents statistically which people who live in those area charged with higher premium than driver who live in rural areas. Of course actual risk is calculated by the zip code you live in. 

Marital Status and Age

If you are under 26, male, you will pay more. People who unmarried and/or without children also part of higher-risk category than married couples with kids.

Traffic Record

Most insurance company checking your traffic record and traffic violations (if any) periodically, applied for their new and existing customer. If you have a traffic violation and your insurer examine it, expect to pay higher auto insurance rates next year. It is important note, that having no accidents or tickets will lower your auto insurance premiums.

Skipping Auto Insurance

If you have a thought to skip auto insurance in order to save your money, don't do that. Not having auto insurance, even for just 30 days, will make your premiums jump higher.

Nobody wants to involved in car accident and sometimes filing insurance claim could be exhausting and involving long process. According your car insurance type, you need to file a claim to your insurance company when your car collide with another vehicle, being vandalism victim, stolen or damaged from weather, animal or fire. Make sure you prepare your personal data, such as policy number, your policy's duration, date and time of incident, and so on. Your insurance company might ask further question in the process to complete your statement. The more detailed information and evidence you can collect, the better. 

Information You will Need

Pass all of these information to your claim adjuster and make sure you also have the copy for yourself. You also need to contact your insurer as soon as possible. It will be easier for them to get accurate data. If possible, call them from the scene of accident. Even if you ask for your claim adjuster to proceed the claim, you need to be cooperative and prompt. Good communication is the key to speed up your claim process. And last but not least, be honest. Even if you are at fault in the accident, don't try to get out with lies. Insurance fraud could cost you a lot more money than the premium itself. 

Insurance claim is a formal demand to insurance company for a payment based on insurance policy. Claim may be filed directly to insurance company or filed through their insurance brokers or agents. Insurance broker/agent duty including sells, solicits, and/or negotiate insurance for compensation. Marsh & McLenna, Aon Corporation, Arthur J. Gallagher & Co and Willis Group are the largest insurance brokers in the world based on revenue. 

Insurance company reviews the claim for its validity and will pay the claim to the insured or third party (broker or agent on behalf of the insured) once the insurer approved. Most insurance company claims department hire a large number of claim adjusters. Claim adjusters or claim handler will investigates insurance claims by interviewing the claimant and witnesses, consulting police, checking hospital records, and inspecting property damage to determine the extent of the insurance company's liability.

These are typically claims adjusters' duties :

Insurance company need to balance the elements of customer satisfaction, administrative expenses, and claim overpayment leakages. The company have to manage and overcome the major business risk, fraudulent insurance practices. It may lead to a disputes between insurers and insurance company and could escalates into litigation.