Last month, a North Carolina woman Debra Gail Hodges was arrested and placed under a secured bond of $4,000 for insurance fraud stemming from her homeowners insurance coverage on her Fayetteville home. She was officially charged with “one count each of insurance fraud, attempted insurance fraud, obtaining property by false pretense, and attempting to obtain property by false pretense,” according to Insurance Journal.
The industry publication went on to elaborate that “on July 13, 2011, Hodges filed a claim with Liberty Mutual Fire Insurance Company for $10,000 worth of vandalism and other damage to her Fayetteville home, for which she presented a list of damaged items with receipts. The insurance department’s criminal investigators accuse Hodges of including a chandelier in the claim that she had actually returned to a local store for a $648 refund.”
After benefiting from a tip given to them by Liberty Mutual, an investigation into Hodges’ activities was launched and it was determined that she reported the same chandelier stolen in 2010 and received an additional insurance payment for it after that reported incident. In summation, Hodges purchased and then returned a chandelier (for a refund), then claimed it stolen and was given an insurance payout for it. She then took the farce one step further and claimed it damaged a year later. It seems as though her lack of creativity when filing claims with this repeated item is what ultimately did her in.
A rather disturbing statement was issued by the insurance department of the state of North Carolina in the wake of Hodges arrest and subsequent charging: “an estimated 10 cents of every dollar paid in premiums goes toward the payment of fraudulent claims” in North Carolina. And most U.S. states, upon examination, find themselves in a similar dilemma. More and more–especially with the economic downturn–policyholders may feel as though they must compensate for lesser incomes by “finding” money wherever they’re able to. The country is in a most difficult financial position at the moment and fraud is on the rise as a result.
In response, claims adjusters must strive to be cautious and vigilant when handling claims. If anything raises a red flag to the discerning eye, it should be explored to verify that there isn’t any fraudulent activity occurring. Like the adjusters who tipped off the North Carolina insurance department about Hodges, adjusters are encouraged to follow a “see something, say something” policy when anything questionable appears on a claim.
It’s unlikely that fraud will disappear from our lexicon anytime soon, so, until we live in a utopian society, we must simply work our hardest to prevent it from happening.