5 most expensive insurance payouts so far

Misfortunes can be good sometimes. There have been different cases where victims have made a huge profit from their unlucky incident. Some people stage incidents to unbelievable limits to make their insurance claims. For example, Gerald Hardin in South Carolina planned to cut off a friend’s hand to claim a compensation of $670,000 in 2008. In another case, a Canadian cyclist stuck a toothpick up his nose so that it bled and asked his girlfriend to run a car over him to claim $22,000 insurance money. However, in both cases, the insurance companies intelligently found out about the false claims.

Insurance business can make big money for both the insurers and the claimants. Here are the five most expensive payoffs in the recent years.

Hurricane Katrina

11

Claim: $130 Billion
The collective disasters of the three consecutive hurricanes Katrina, Rita, and Wilma in 2005 cost more than $130 billion in damages. Nearly 4,000 people were killed, and the U.S. government was criticized for slow response to the hurricane in New Orleans and other areas. The payout was given for home and business damages, personal injuries and fatalities during the storm.

Volcanic Ash Cloud

12

Claim: $3.4 billion
A costly volcanic eruption occurred in 2010 in Iceland. Nobody was injured, but it will cost Europe $3.4 billion. The massive ash cloud was released due to the volcanic eruption as it drifted south the Atlantic and continental Europe. The eruption caused many flights to be canceled, and millions of passengers were left stranded for weeks. It also created a no-fly zone over a wide area of Europe which affected many international airlines that are based in Asia and the U.S.

Three teenage crash victims

13

Claim: $37 million
In London, a 17-year-old student named Agnes Collier was left paralyzed due to a head-on collision with another vehicle in an accident. Her mother was killed in the accident. She received $11.5 million as a lump sum payment and $11.5 million. She will also receive the annual fund to cover her medical costs. In a lifetime, she will get $37 million. Collier is now better as some of her motor functions have returned to her arms. She did very good in her A-level exams and will probably get into Oxford University or Cambridge University.

Slip and Fall

14

Claim: $7.75 million
It is common to slip and fall on the ice during winter months. In 2012, a person in Virginia broke many leg bones when he left his apartment and slipped on ice in the driveway. Later, he had serious complications due to the injury. It even risked having his lower leg to cut off. But the treatment got even more complicated as the victim had diabetes. The claim was high because it was reported the homeowner never removed fallen snow from the driveway. The homeowner also didn’t treat the icy areas with sand or salt even though it’s law.

Mr. Bean’s car

15

Claim: $1.5 million
Rowan Atkinson, famous for his character Mr. Bean, recorded the largest car insurance claim in the history of UK. He only suffered a minor shoulder injury as his McLaren car crashed. The car hit an icy patch of a way in England. Atkinson bought this car in 1997 for $1.05 million. The insurance premium for Atkinson must have gone high now.

Looking at these huge claims, you must be thinking of getting insurance for your home or car right now. Having insurance is a smart idea to be prepared for accidents and natural disasters.

4 ways insurance companies can detect insurance frauds

Insurance companies lose billions of dollars in fraud acts. There are many ways an insurance company can detect insurance scams. There are four ways insurance companies can track down people involved in fraud acts.

History of claims

The insurance company analyzes the client’s history of making claims against an insurance policy. Some companies have a limit on the number of claims before the termination period of the coverage. This helps to protect the company against risk. Many people make frequent claims. For example, if a person has already filed claims for losses due to theft in the past year, then the insurance company will analyze the details related to the claims. They will discuss the issue with the police officers to find out whether the client is telling the truth or not.

Third parties

The insurance industry gets reports of fraud from third parties who try to get the inside information about an incident. These third parties called ‘whistleblowers’ find out whether it was a fraudulent claim. If they are successful in getting back the money that was taken falsely, then the whistleblowers are awarded a portion of the money recovered.

Analysis

The insurance company analyses the claim and compares it to the others. Claims which are for certain types of insured risks fall within a particular range. If some claims are on the high side of the average are turned over to insurance investigators. They further review the case and analyze them. If the claim is high, the insurance company requires extra proof. They might also inspect the situation in person.

Surveillance

Insurance companies can monitor clients directly using surveillance cameras. This is common in cases of disability insurance claims. In this case, the client claims injuries that stop them from working. The client is asked to fill out a questionnaire when applying for benefits. In the questionnaire, the client has to document his or her daily activities that he or she can perform after the accident. The insurance company will look at the video surveillance that was installed at the client’s properties. If the mobility of the client matches with what he or she mentioned in the questionnaire, then they give them.

Insurance companies have become more alert now of these kinds of fraudulent activities. They don’t pay the money for the claim without investigating things further. If you are caught once that you have made a fraud claim, then you won’t get the insurance money, and your reputation will be ruined. So, you must be honest all the time. If you claim truthfully, you will get whatever you are eligible for.

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5 most common types of insurance frauds

It is now very normal for people to cheat insurance companies out of money. It is estimated that insurance companies lose about $30 billion per year for insurance fraud costs. Here are the most common types of insurance frauds.

Stolen Car

1

There are two types of fraudulent activities involved in the case of stolen cars. First, the car owner can sell his or her car to a body shop and ask them to cut up the parts and file a claim for a stolen car. Another way is to sell the car to oversees buyers with a paperless transaction and then reporting it as being stolen.

Car Accident

2

The driver and the victim team up and set the stage. Sometimes even the insurance investigators become also part of the game. The payoff is huge, especially when the accident involves two cars.

Car Damage

3

People report a small car accident and get their claims for the damages, but never repairs the car. This type of incidents is frequently happening. The insurance company has to lose a lot of money for this.

Health Insurance Billing Fraud

4

The health care professionals also get involved in the fraud act. They bill insurance companies a high fee for a normal procedure or bill for services that the patient never rendered.

Fake Home Fires

5

A common form of homeowners insurance fraud is a staging a fake fire. The homeowner removes the important belongings before the fire. In every case, the homeowner doesn’t stay at home when the fire occurs. A criminal is hired to do the job.

Some of these activities are a criminal offense. If you are caught, you will serve many years in jail and have to pay a lot of money in compensation. So, never get involved in such act.

5 factors to consider when choosing an insurance company

An insurance company plays a significant role in securing the financial future for you and your family. So, when choosing an insurance company, you need first to trust the insurer. Then you should consider the following factors.

History

You should find out how many years the company has been in the business. You should select a company that has an established track record. You should take a look at the claim settlement ratio.

Price

You should compare the prices of various insurance companies and find out who offers the best deal. The pricing of the insurance company must complement your financial plan; it shouldn’t exceed your budget.

Size of the company

You should check out the total assets, growth ratio and market share of the company. This will tell you whether the company can fulfill your claims when you make one.

Quality of service

You should learn about the quality of service provided by the insurance company. Observe their communication skills and attitudes. See if they are prompt and patient in answering your queries. Make sure that they understand your financial situation without giving you a sales pitch.

Reviews and complaints

Check out the reviews and complaints about the company. You can look into their website for client testimonials. You can also ask someone you know who has taken an insurance policy from them.

All these factors will assist you to select the right insurance company for your need. You should take the time to decide, as you don’t want to spend your hard earned money on something that you won’t get in a time of need.