Insurance Insurance Fraud Detection & Prevention

Question 1

Which of the following best describes 'soft fraud' in insurance?

Accepted Answer

Exaggerating a legitimate claim to receive a higher payout than deserved

Answer

Soft fraud involves embellishing or inflating a real claim, such as overstating the value of stolen items or exaggerating injuries from a real accident.

Question 2

What is the primary purpose of the National Insurance Crime Bureau (NICB)?

Accepted Answer

To partner with insurers and law enforcement to combat insurance fraud and vehicle theft

Answer

The NICB is a nonprofit organization that works with insurance companies and law enforcement agencies to identify, detect, and prosecute insurance fraud and vehicle theft.

Question 3

Insurance fraud is estimated to cost the US economy approximately how much annually?

Accepted Answer

More than $80 billion

Answer

According to the FBI and industry estimates, total insurance fraud costs the US economy more than $80 billion annually across all lines including health, auto, and property insurance.

Question 4

Which of the following is a recognized red flag indicator of potential auto insurance fraud?

Accepted Answer

The accident occurs shortly after a new policy is issued or coverage is increased

Answer

A claim filed shortly after a policy is taken out or coverage is significantly increased is a classic red flag suggesting the policy may have been obtained in anticipation of a fraudulent claim.

Question 5

What is a 'staged accident' in the context of auto insurance fraud?

Accepted Answer

A deliberately orchestrated collision intended to generate a fraudulent insurance claim

Answer

A staged accident is a planned collision where participants intentionally cause or fake a crash to file fraudulent auto insurance claims for injuries or property damage.

Insurance Practice Test

Insurance Practice Test

Insurance Insurance Fraud Detection & Prevention