Presented by Joseph D. Hampton & Jeffrey S. Tindal May 21, 2013 Suspicious Claims: Trust Your Gut, then Follow Up.

Presented byJoseph D. Hampton &

Jeffrey S. TindalMay 21, 2013

Suspicious Claims: Trust Your Gut, then

Follow Up

Why are suspicious claims today’s topic?• Insurance fraud costs est. $1.6B per year in Wash.• Insurance fraud is a crime• They’re more interesting to talk about!

What’s the basis for resisting such claims?• Criminal law• Insured’s good faith duty• Insurer’s statutory duty 

Why should producers be interested?• RCW 48.01.030’s good faith duty on “all persons”• Fraud runs up costs

Insurance works best when people are honest:• It’s the spreading of risk• The spreading must be genuine• Honesty is essential to genuineness

Trusting your gut:• Not a replacement for SIU• But everyone should be alert...• Does the claim seem “off” to you?

If so, follow up!

Red Flags

Timing of claimPrior claim historyHypothetical questions prior to claimBehavior of insuredWhere property obtainedHow property obtained

Red Flags

Faulty memory or “perfect claim”Claimant attempts to limit info in releaseFinancial motive/personal problemsBulky items claimed in theftSentimental items undamaged

Red Flags

Obvious signs of alterationPhotocopies v. originalsAmount of tax wrongTiming of documentationInvoices v. estimatesDiscrepancies

Red Flags

Weird accounting recordsInconsistent or lack of physical evidenceSpoliation of evidenceUncorroborated documentationInability of insured to answer routine questions

Red Flags

Vague and ambiguous detailsApplicant has or wants “excess” insuranceFailure to sign and dateFailure to answer pertinent questionsVital info incorrect

Tactics

Proof of loss formRecorded statements/EUOsRequest for documentation/financial informationInspectionsBackground checks

Case Study No. 1: The Hurried B.I. Claim• threats of suit in excess of limits• pushing resolution; close deadlines• over $350,000 in PIP and settlement paid

Case Study No. 1: The Hurried B.I. Claim• threats of suit in excess of limits• pushing resolution; close deadlines• over $350,000 in PIP and settlement paid

UIM claim brought:• “permanently disabling back injury”• we demanded/got med record release• found original records . . .

Finding: preexisting back injury concealed:• manipulated records:

 • original records:  

Result:• claims dropped• guilty plea to felony theft• restitution ordered

Lessons:• insist on authentic evidence• confirm authenticity• review, analyze and compare

Case Study No. 2: Sailor’s Tall Tale• 55-foot sailboat• skipper fleeing ex-wife• heading Olympia to Hawaii• girlfriend on board; only crew

USCG rescue at 125 n.m. offshore• 75 n.m. coverage limitation• “we were hugging the coast”• “got pushed out by storm” • “couldn’t make it back in”

Supposed route of the S/V Mystery Ship

Investigation:• recorded statements• E.U.O.• weather data• hired weather expert

Result: • claim withdrawn• no suit

Lessons:• pin the insured down • test and question the story• obtain historical evidence• compare story and evidence

Case Study No. 3:

Golfing granny?

• theft loss at trailer• mentally disabled son not home

Red Flags

• multiple prior losses• high ticket items• cash purchases/gifts • faulty memory

Tactics employed

• PILR• recorded statement• EUO• contacting alleged sources

The “aha” moments

• iPod from ex-boyfriend• Thomas Kincade paintings• golf clubs from “granny”

Result:

• got attorney up to speed• settlement negotiations• standing firm• voluntary dismissal of all

claims in lawsuit

Case Study No. 4: Manufacturing evidence• fire loss to home• “ALE” claim• loss of rents on rental duplex• lease as proof of rent amount

Something didn’t smell right• insured slow in cooperating• insured difficulty with documents• but lease was found

More bad smells:• utility record discrepancy on duplex units• lack of corroborating evidence• no effort to locate tenants• lease form. . .

Date on Lease:

Date code on lease form:

FORM NO. 13.5B© 2006-2009 Washington Legal BlankPortland, OR www.wlbmforms.com EN

FORM NO. 13.5B© 2006-2009 Washington Legal BlankPortland, OR www.wlbmforms.com EN

“EN” means “2009” so:“[Lease] could not have been signed . . . in the year 2008 . . . because [the form] was not released for sale . . . until . . . 2009.”

-- Legal Form Co.

Result: • conceded counterfeit• more lies discovered• directed verdict granted before trial• insured has appealed!

Trust Your Gut: is something amiss?• go back over evidence• scrutinize the details• talk to others• go to the source• get expert help

Questions?