An insurance fraud investigation attempts to verify the validity of a claim for compensation relating to a specific insurance policy. Generally, insurance companies have a list of “red flags” that might indicate false or inflated claims. A claim that contains one, or more, of these “red flags” should have an investigation to get to the truth of the claim. However, this is not always the case.

Insurance companies routinely weigh the cost of an investigation (and possible litigation) against the potential loss of paying out on a filed claim. Some insurance companies have a very aggressive attitude towards fraudulent insurance fraud claims, believing that it is best to defend against such claims and to seek criminal charges whenever possible. Some companies find whatever route will be least costly to the business. Most insurance companies, however, fall in between these two extremes. When it comes to workers’ compensation or other business-related claims, insurers will often seek input and guidance from the insured in how claims are to be addressed. Afterall, paid claims, even nuisance payments, can mean increased premiums for the business.  

Property/Casualty Fraud Insurance:

According to the Insurance Information Institute (III) “industry estimates generally put fraud at about 10 percent of the property/casualty insurance… over the five years from 2013 to 2017, property/casualty fraud amounted to about $30 billion each year.”  

Specific to vehicle insurance, common fraud schemes include “stage(d) accidents in which they purposely collide with another car, then accuse the other driver of fault to file claims. Others attempt vehicle theft fraud, trying to get money for a car that is not stolen.” Many property fraud claims will similarly include theft, or loss, of valuable items that were never missing or stolen.

Workers’ Compensation Insurance:

On-the-job injuries are thankfully much less common than they once were, but accidents and faulty equipment can still have devastating consequences for employees, coworkers, and employers.  A workers’ compensation investigation can substantiate the severity of a claimed injury, whether, or not, the injury occurred at work and may an include a determination as to if a legitimately injured employee is “milking the system” by avoiding coming back to work. According to III, “Common red flags are injuries reported on a Monday morning, after a delay, before or after a strike or layoff, without a witness or without treatment. Other warning signs are suspicious behavior before a claim, such as a claimant’s history of numerous claims, jobs, addresses or medical providers.”

Sub rosa is a Latin term meaning “under the rose” and was a term meant to include actions taken in secrecy. Specific to the investigation of workers’ compensation insurance fraud, sub rosa refers to covert surveillance conducted to determine if an individual is as injured as they are claiming. The surveillance is meant intended to show how the claimant acts during a person’s “unguarded moments” with the purpose of documenting the person’s true physical limitations. People can often be left with a negative impression on this information gathering method because of the “secrecy” involved in covert surveillance. However, as tools for truth-seeking, these videos can be “worth their weight in gold” in determining the truth. Here is one of our examples:

A woman complained that her lower back was so injured from a fall at work that she was almost completely bedridden. As an example of her incapacitation, she stated under oath that she could not raise her foot high enough to step into her standing shower unassisted, even though the lip of the shower was only three inches from the floor. Sub rosa videos, shot on multiple days (before and after her statement), showed the same woman working out at a college gym as part of her circuit weight training course. She was able to complete the workouts at all 15 circuit weight training stations, 3 times per week for several observed weeks, with no assistance, limitations or any signs of pain.

Other fraud schemes can relate to fake medical billing (Medical Insurance Fraud), fake death (Life Insurance Fraud), false claims of property repair (Flood Insurance Fraud), etc. There are a limitless number of potential frauds that can be plotted and performed.

Insurance Information Institute, “Background on: Insurance fraud,” November 14, 2018,