Certain loopholes in the insurance policies make it easy for scamsters to easily dupe the insurance firms. There have been many such insurance scams till date. While many have been exposed, there may be many more that might not have been exposed. Here are some of the biggest insurance scams that were uncovered:
1. South Korea Scam: considered to be one of the biggest scams not just in the country but in the world, the South Korean authorities recently exposed an insurance scam the amount of which was said to be around $12 million. As reported, more than 1,300 people were involved in the scam which included insurance workers, women and the staff of three hospitals. The scam involved the exaggeration of the patients of their illnesses to claim an amount to the tune of $10.36 million. The modus operandi of those involved was to exaggerate an illness for which no treatment was given. False reporting and fabricating accidents, the residents received their insurance payments while the hospitals and the insurance firms had an under-the-table arrangement.
2. Worker’s Compensation Insurance Fraud in California: the fraud was uncovered in 2009 when a husband and his wife were believed to be living a grand and lavish lifestyle, which would have been beyond their means, otherwise. Devon Lynn Kile and her husband Michael Vincent Petronella raked in $38 million by fraudulent practices. They filed a false tax return and misrepresented facts to the insurance company to claim the said amount. They were identified from the lavish lifestyle they were pursuing on insurance money.
3. Fake Health Insurance: the scam of fake health insurance was uncovered in 2010 when people were sold worthless insurance policies by unlicensed companies. While this scam involved unlicensed companies, a similar scam involved known names like Consumer Health Benefits in Florida, Health Care One in Arizona and United Benefits in Tennessee when they issued worthless discount cards in lieu of the promised medical insurance. The scam was to the tune of $100 million.
4. Fake Car Insurance Claim Colorado: the scam involved 12 individuals who filed 35 fraudulent cases with 12 different auto insurance companies. Committing the fraud, these individuals staged accidents, faked thefts and even committed fraudulent vandalism. The claims filed between 2007 and 2009 totaled $460,762. The scam was unearthed before it could run into millions.
5. Medicare Scam: several cities like Detroit, Miami, Baton Rouge, New York City, Louisiana and Houston were involved in the biggest medicare scam in USA. Involved in the scam were several doctors, nurses and professionals who fraudulently allowed false claims and over-billed certain equipments. Even fake clinics which proved to provide no fruitful care were set up by the fraudsters. Before the scam could be uncovered, there had been a loss of more than $250 million.
6. Auto Insurance Fraud: 36 people were charged for an automobile insurance scam in which the insurance companies were duped of more than $279 million, in New York. The fraud was committed under the no-fault automobile insurance law. Under the law, any injury sustained during an automobile accident is liable to be reimbursed up to $50,000. The law requires the payment to be made quickly in order to continue the medical treatment. The fraud committed by the said people was that they faked injuries and got reimbursements for treatment that had never been given.
7. Auto Insurance Fraud Orange County: another of the biggest insurance scams was un-earthed in Orange County in which the insurance companies were duped of more than $1.2 million. At least eight insurance companies were bilked in the incident. The mastermind of the scam, Norman Sidney Gerstein indicted several people to stage fake car accidents and claim damages from the insurance companies.
Charles Henry works for Rentersinsurance.net a company that helps families search for affordable renters insurance online.