Insurance Insurance Fraud Detection & Prevention 2

Question 1

What is 'hard fraud' in insurance?

Accepted Answer

Deliberately planning and executing a false claim or loss event to collect insurance proceeds

Answer

Hard fraud involves deliberately planning and committing a fraudulent act, such as intentionally burning a home or staging a theft, specifically to collect insurance money.

Question 2

What is the 'swoop and squat' technique in auto insurance fraud?

Accepted Answer

A staged rear-end collision caused by one vehicle cutting in front of another and braking suddenly

Answer

In a swoop and squat scheme, one vehicle pulls in front of another and brakes suddenly, then occupants file fraudulent injury claims against the innocent rear driver's insurer.

Question 3

What is 'claim padding' in insurance fraud?

Accepted Answer

Inflating the value or extent of a genuine loss beyond what actually occurred

Answer

Claim padding involves inflating a real loss—such as listing additional stolen items that were not taken—to receive a larger settlement than actual damages warrant.

Question 4

What is the primary role of a Special Investigative Unit (SIU) within an insurance company?

Accepted Answer

A department dedicated to identifying and investigating potentially fraudulent claims

Answer

Special Investigative Units are dedicated teams within insurance companies tasked with identifying, investigating, and referring potentially fraudulent claims to law enforcement.

Question 5

Which of the following is NOT typically considered a red flag for workers' compensation fraud?

Accepted Answer

The treating physician is selected from the insurer's approved provider network

Answer

Using a physician from the insurer's approved network is standard compliant practice, not a fraud indicator; the other options all suggest potential fabrication or exaggeration of a claim.

Insurance Practice Test

Insurance Practice Test

Insurance Insurance Fraud Detection & Prevention 2