This post appears as part of Goldstein Law Group’s blog series for International Fraud Awareness Week (November 16-22). This week, GLG attorneys address five types of insurance fraud the firm encounters on a regular basis.
When it comes to your home and business, having insurance to protect against water damage is a wise investment. It provides peace of mind in the event a water supply line breaks and causes damage to your property and possessions. However, you may not be aware that some individuals see this as an opportunity to cash in at the expense of your insurance premiums.
Today we focus on false water supply line claims. This scheme, which we encounter on a regular basis at Goldstein Law Group, involves claiming fraudulent damage to property and possessions due to incidences of sewer or drain backup, or sudden and accidental water damage from a plumbing system. The motives behind fraudulent claims for water supply line damage range from financial want to need. This category of fraud can also be enticing to fraudsters because there is room for creativity.
In many cases of false water supply line claims, individuals will purposely cause the water damage. He or she may fabricate a supposed plumbing failure by intentionally breaking the pipes or supply lines in order to fraudulently claim and receive an insurance payment.
Another common way individuals commit water supply line insurance fraud, whether intentionally or not, is by inflating the estimate to obtain more money from the insurance company than is necessary to replace or repair damages. These inflated invoices could be the result of over-estimating the cost to repair the damage, or including personal items in the claim that were, in fact, not damaged. Some people see it as a way to make the most of a terrible situation, while others purposely try to rack up a high bill to line their pockets.
Fraudsters also may fabricate evidence, such as forged invoices, to support their claims. These forgeries are attempt to make a claim seem more legitimate, while assigning their own price tag to damages to maximize their “winnings.”
While it may seem like water supply line insurance fraud is complicated to prove, Goldstein Law Group’s attorneys are seasoned experts in spotting “red flags” in water damage cases by verifying paperwork and examining the scene of the damage. You can do your part by reporting suspicious cases and always providing honest accounts in insurance claims.
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