The Coalition Against Insurance Fraud has just released the 2011 inductees into its Insurance Hall of Shame. The Hall of Shame “annually dishonors the year’s most brazen, vicious or plain klutzy convicted insurance criminals.” While the sheer audacity of some of the scams may amuse you, you should also be outraged because insurance fraud cost all of us a collective $80 billion a year, according to Coalition estimates. That’s enough to pay the annual salaries of 2.2 million American workers or four years of public university tuition for almost 15.6 million U.S. students. In other words, a whole lot o’ dough. Since we’re all about helping you save money when shopping for insurance online, we’re happy to pass along this year’s Hall of Shame “winners.” You can read the entire 2011 list, find lists from past years and get a wealth of information about preventing and reporting insurance fraud at www.insurancefraud.org.
- Two Los Angeles women invented a man, took out a life insurance on him and filed a claim when he died of a heart attack. They even staged a funeral. When the life insurance company got suspicious, they dug up the empty coffin, filled it with a mannequin and cow parts to make it seem heavy and had it carried to a crematorium to destroy the evidence.
- Some cash-strapped Manhattan diamond merchants hired two men to pretend to rob their business so they could file a claim for the insurance. They forgot to turn off their security cameras, which showed the merchants stealing their own diamonds before the hired robbers got there.
- A Los Angeles cop claimed he was shot while wearing a protective vest so he could fake an injury and collect workers comp paid time off.
- A Rhode Island woman who wanted to remodel her home hired two corrupt politicians to trash the place so it looked like the damage had been done by storm damage. Then a corrupt adjuster helped facilitate the claim. But one of the politicians disclosed the fraud while he was being wiretapped for another scam.
- A Los Angeles gang cheated Medicare out of $163 million by setting up fake clinics in 25 states and stealing the identities of doctors and Medicare beneficiaries. They even recruited Medicare patients for fake treatments and staged car wrecks so they could file false injury claims.
- A Chicago woman collected $25,000 on an employer-provided life insurance policy, claiming her child and husband had both died just months apart. She said her hubby was an FBI agent who’d been shot in the line of duty. Too bad for her, the fraud investigator was a retired FBI agent who knew no such agent existed. It also turned out that the child had died many years before the claim.
If you suspect insurance fraud, the Coalition Against Insurance Fraud recommends that you report it to your state insurance commissioner, file a complaint online with the National Association of Insurance Commissioners or notify the insurance company. You can also call the National Insurance Crime Bureau Hot Line at 1-800-835-6422. Tips can be anonymous.