In most countries, as in the Netherlands where I happen to live, it is mandatory to be insured for healthcare and to have liability insurance for your vehicle in case you are responsible for someone else’s damage. Having insurance is considered a normal thing in life. And I believe it is a beautiful thing.
I have a variety of things covered by insurance:
- Home & Property
My cats probably hate me when they go to the vet for a check-up. But I am happy how easy it is not having to pay any bills after they are treated or to worry about not being able to care for their treatment at all.
The hidden cost of dishonest behavior
Unfortunately, getting things “easily” taken care of by insurance, also attracts a more dishonest type of person: the fraudster.
While most of us would consider those that commit fraud to be criminals, there is another group of people that glorifies committing fraud and the thrill of getting away with it. There are even individuals that commit fraud for a living. The price of committing fraud is high. The cost is high for the fraudsters themselves if they get caught. But more unfortunate is the price you and I pay on their behalf.
So before you decide to commit fraud for a living, keep in mind that there is always the chance of getting caught in the act. In this CNN article we see a great example of a person that thought he could get away with committing fraud. While the main character probably thought he would get some quick money from insurance, he ended up being arrested over this incident. As they say … karma is a b*tch!
The Fraud Triangle
The main character got caught, but why would he commit fraud in the first place?
One can only guess his personal motivations. But there is actually a logic as to why people commit fraud. The Fraud Triangle explains it from three angles: rationalization, pressure and opportunity.
The fraudster thinks it’s ok to commit fraud, the fraudster needs (or wants) the money, and the fraudster has the ability to commit the fraud.
Putting theory to practice
With the Fraud Triangle in mind, please let me introduce you to Bob.
Bob has been saving money to buy a new car. So far, he saved about 40% for his dream car. However, saving money seems to take too long. He decides to take a risk and hopes gambling might double his cash… he was wrong. Bob then decided to change his luck and wrecks his current car, knowing it will cover at least his recent gambling misfortune. He drives the car to a quiet place and fakes an accident. After his perfectly executed plan, he decided to aim high and claim the total amount to buy his dream car. Here is where the fraud games begin!
So, do you think what Bob did was a smart move?
Since we all rely on insurance to live our best lives, there are three good reasons I’d say it wasn’t:
- Insurance companies need to cover the costs of claims. That money needs to come from somewhere, and it comes from our insurance premiums.
- Time spend investigating fraudulent claims could be better spent paying legitimate claims faster, turning honest customers’ moments of misery into moments of magic.
- While you think you can get away with it, the consequences for getting caught are many: You may never qualify for needed insurance in the future, you could end up in jail and it could become quite embarrassing – the internet never forgets!
Don’t be like Bob
After an investigator looked into Bob’s case with the help from FRISS, he noticed quickly that something was not right and Bob was trying to commit fraud. The insurer cancelled his policy and now Bob has a bill headed his way to cover the investigation costs, ouch!
On top of that, he now has to search for another insurance company. Chances are that his fraudulent past will come up and they will reject him, double ouch!
Bob becoming a failed Fraudster will now hunt him for many years to come.
Make the world a little more honest
Help us at FRISS to create a better world by making insurance more honest. We help insurance companies to maintain a healthy and honest portfolio. This allows insurers to focus on what benefits us all:
Keeping your premiums low, focusing on fast payment of your claims, and taking genuine care for their customers.
Be a superhero, support honest insurance!
– The Solution Sidekick
About the author
Marcy Koopmans is a Value Cycle Consultant at FRISS. She started her career as a Business Technology professional and rolled into the interesting world of insurance.
Marcy’s AKA is The Solution Sidekick because she helps different international insurers to maintain, personalize and improve their FRISS Solution while being the link between Business and IT.