Savvy investigators can detect fraud and prosecute suspects using certain insurance fraud indicators. Just as every poker player has a “tell,” investigators search for a fraudster’s tell—an indication that a consumer, provider, insurance company, or adjuster is attempting insurance fraud.

Fraud indicators don’t automatically indict a person or give a company legal basis for denying a claim. Instead, they initiate an investigation in the alleged fraud. It’s important to know common insurance fraud indicators to avoid triggering a full-scale investigation during a legitimate claim.

Property Damage Doesn’t Match Injuries

In insurance fraud based on personal injury, the claimant’s alleged injuries often don’t match the amount of vehicle property damage. For instance, a woman claiming whiplash in a rear-end collision with no more than a vehicle scratch might alert the claims adjuster to fraud. If the damages to a vehicle are minor enough to lower the likelihood of any occupant sustaining an injury, it’s likely an attempt at fraud.

History of Prior Claims

If a claimant has a long history of prior car accident or personal injury claims, it could be a pattern of fraudulent activity. A common example is a person whose history of claims has increasingly greater values. This shows the perpetrator is testing the system to see how much money he or she can steal without getting caught. In these cases, the perpetrator’s first claim may have been legitimate. The claimant realized how easy it was to “milk the system” and started making fraudulent claims.

Situational Clues

Good investigators know to look for certain fraud indicators in a claimant’s recent and ongoing situational clues. If a claimant recently declared bankruptcy or filed a substantial financial loss, for example, it could give the person a motive for insurance fraud. Another red-flag situation is if the claimant recently purchased a new insurance policy. Claims managers know to look for this as an immediate sign of fraud and will likely put an investigator on the case right away.

Familiarity with the Claims Process

Although it’s not unusual for a person to be familiar with the accident claims process, especially those in repeat accidents, he or she shouldn’t be too familiar. If a claimant is overly knowledgeable about the insurance process, lingo, terminology, and standard procedures, it’s a sign that he or she has done this too many times before or has researched what to say.

Different Versions of What Happened

Any major discrepancies in two peoples’ accounts of the same accident are going to set off an alarm. If two drivers dispute how many people were in a vehicle at the time of the crash, for example, or if one driver says no crash happened at all, these are indicators of fraud. Truthful claimants will have the same or at least a similar version of the accident as the other driver.

Evident Falsification of Injuries

If a claimant waits an abnormally long time after an accident to see a doctor for injuries, it’s a sign that he or she didn’t sustain the injury in the crash. Often, a fraudster might use an old car accident to receive a settlement check for a new injury. Other signs of this type of fraud are medical documentation or lost wage forms that appear falsified.

Insurance fraud is a serious allegation—one that upon conviction can lead to felonies, prison sentences, and civil penalties. Insurance companies can prosecute anyone they suspect of using false information or intentionally deceiving a claims adjuster during the claims process. While many believe insurance fraud is a victimless crime, it costs society billions of dollars every year.