CALA Fraud Detection & Prevention 3 ā Questions and Answers
Question 1: A claimant alleges total theft of a vehicle, but GPS data from the insured vehicle shows it parked at the claimant's workplace during the alleged theft window. This is an example of:
- Soft fraud involving owner misrepresentation
- Hard fraudāfabrication of a loss (Correct answer)
- A coverage gap scenario
- An underwriting dispute
Correct answer: Hard fraudāfabrication of a loss
Fabricating a theft that never occurred using false statements is hard fraud, and GPS data is direct digital evidence contradicting the claim.
Question 2: When an SIU investigator conducts surveillance on a disability claimant, which legal principle must guide the investigation?
- Surveillance may occur anywhere including inside the claimant's home
- Surveillance is permissible only in public spaces where there is no reasonable expectation of privacy (Correct answer)
- Investigators may enter private property if they believe fraud is occurring
- No legal restrictions apply since the insurer owns the claim
Correct answer: Surveillance is permissible only in public spaces where there is no reasonable expectation of privacy
Surveillance must be conducted only in public areas where there is no reasonable expectation of privacy to comply with privacy laws and avoid evidence suppression.
Question 3: Which of the following is a 'soft fraud' scenario?
- Staging a car accident with paid participants
- Adding pre-existing damage to a legitimate storm damage claim (Correct answer)
- Submitting a fire loss claim for a house that was never damaged
- Creating a fake policy to collect premiums
Correct answer: Adding pre-existing damage to a legitimate storm damage claim
Soft fraud involves exaggerating or embellishing a legitimate claimāsuch as adding pre-existing damageārather than fabricating a loss entirely.
Question 4: A homeowner files a claim for water damage and lists a 75-inch television as damaged. The adjuster finds an older 40-inch TV during inspection. Which fraud indicator is present?
- Misrepresentation of damaged property value (Correct answer)
- Premium fraud
- Application fraud
- Third-party claimant fraud
Correct answer: Misrepresentation of damaged property value
Listing a higher-value item than what actually existed is misrepresentation of property, a common contents fraud technique.
Question 5: The Coalition Against Insurance Fraud (CAIF) primarily serves what function?
- Prosecuting insurance fraud cases in federal court
- Advocating for anti-fraud laws and coordinating public awareness campaigns (Correct answer)
- Setting claim settlement standards for insurers
- Managing the NICB database of stolen vehicles
Correct answer: Advocating for anti-fraud laws and coordinating public awareness campaigns
The CAIF is a nonprofit alliance that advocates for stronger fraud laws and promotes public awareness about the costs of insurance fraud.
Question 6: During a recorded statement, a claimant provides inconsistent accounts of how an injury occurred. What is the best immediate action for the adjuster?
- End the interview and deny the claim
- Document the inconsistencies and refer the matter to SIU for further review (Correct answer)
- Accept the most recent version of events as controlling
- Advise the claimant to consult an attorney before continuing
Correct answer: Document the inconsistencies and refer the matter to SIU for further review
Inconsistent statements are a fraud indicator that warrants documentation and SIU referral rather than an immediate denial or acceptance.
Question 7: Which clause in a property insurance policy allows the insurer to void coverage if the insured intentionally conceals or misrepresents material facts?
- Subrogation clause
- Concealment and fraud condition (Correct answer)
- Mortgagee clause
- Coinsurance clause
Correct answer: Concealment and fraud condition
The concealment and fraud condition gives the insurer the right to void the entire policy if the insured intentionally misrepresents or conceals material information.
CALA Fraud Detection & Prevention 3
A claimant alleges total theft of a vehicle, but GPS data from the insured vehicle shows it parked at the claimant's workplace during the alleged theft window.
This is an example of: