If you’re in the process of changing insurance companies or filing an insurance claim, there are a few things you should know. No one wants to make mistakes when it comes to insurance. And you definitely don’t want your claim to get denied. Here are a few red flags that insurance companies look for when they receive a claim.
1. Filing a Claim Shortly After Purchasing a Policy
One major red flag that points to insurance fraud is filing a claim shortly after purchasing your policy. This will make your insurance company question whether the claim happened prior to your coverage. If this isn’t the case, make sure that your documentation is clear. Also, make sure that you didn’t have a lapse in coverage or that you claim any prior damage.
2. Increasing Coverage Just Before Filing a Claim
Again, another red flag is increasing your coverage out of the blue and then filing a claim immediately after. Insurance companies will immediately be suspicious of this activity. Make sure that you file claims at the appropriate time. You wouldn’t want to inadvertently participate in insurance fraud.
3. Inconsistent Stories
Insurance companies look for inconsistencies related to a claim. Inconsistencies between witness statements and the policyholder’s account of the incident could raise red flags. Make sure you are clear with your account of events and don’t embellish. Additionally, if you need a police report make sure you file one. This could help validate your story.
4. History of Fraudulent Claims
Insurance companies will look for a history of fraudulent claims. You may be denied during the application process if you’ve had discrepancies in the past. Always make sure that you are honest with your insurance company. If not, it could affect your future claims.
5. Many High-Value Claims
If you make several high-value insurance claims, you may raise red flags with your insurance company. Especially when it is damage or theft of family heirlooms that are almost impossible to establish a value for, make sure that you are realistic with your claims so that you don’t raise concerns. Insurance companies may take a closer look if you file too many high-value claims.
6. Padding Insurance Claims
If you pad your insurance claim or exaggerate in any way, you could raise red flags. According to a study by the Insurance Research Council, a quarter of respondents thought it was OK to pad their insurance claim to cover a deductible or recoup past premiums. This in fact is insurance fraud. Make sure that you are always truthful when making insurance claims.
7. Misrepresenting Yourself
Sometimes red flags are not as obvious. If you for instance misrepresent yourself on your insurance application, you could be committing fraud. For example, if you don’t add a teen driver or underreport the miles you drive annually to keep premiums lower, these could raise red flags.
8. Handwritten or Altered Documents
Handwritten or altered documents are a no-no for insurance claims. If you provide handwritten receipts for repairs or replacement of damaged property, you may raise red flags. Make sure that you have the proper documentation required for your insurance claim. This way you won’t have any problems with your claim.
9. Missing or inconsistent medical records
If you are filing a worker’s compensation claim, make sure that your claim is not exaggerated. Your diagnosis and medical records should match the severity of your injuries on your claim. The same is true for automobile injuries. If you aren’t truthful, you could face fines or even jail time.
10. Unusual Circumstances
Sometimes unusual circumstances can raise red flags. For example, if a claim coincides with a life event it could be questioned. This could include events such as divorce, job loss, or financial distress. While you can’t control the timing of your claim, make sure that you are ready for additional questions.
Filing Insurance Claims Successfully
Insurance claims can be complicated and there are many pitfalls that can inadvertently raise red flags. If you need help with insurance claims, you could consider hiring an insurance adjustor to navigate the process. Ultimately, if you avoid these red flags your insurance claims should be more successful.