Refuting Illegitimate Claims: Identifying Red Flags

‘Listen to your gut!’ That’s what we’ve always been told, right? This old adage also holds true when handling a claim. Is your gut telling you that a certain claim doesn’t add up? Are you asking yourself if the claim is legit?  Questions are swirling and you think you need to investigate a certain claim – what should you do? Is there a secret code to abide by?  Well, in a way, yes – you need to let the red flags guide you! 


“Once you identify red flags and deem a claim suspicious, it is time to investigate!”

Throughout my career, I’ve seen senior claim handlers continuously use red flags to help distinguish the suspicious claims from the ordinary claims.  Once you identify red flags and deem a claim suspicious, it is time to investigate!  


Over the years, I’ve worked with many adjusters and risk managers who have told me they want to ‘investigate them all.’  Unfortunately, we know this isn’t practical, nor is it logical. Although many industry veterans can become jaded, it is important we remember that insurance is here to serve a purpose -- to assist and compensate those who are legitimately injured and in need. However, we need to be careful not to turn a blind eye to those taking advantage of the system. Instead, we need to strategically use red flags to help pinpoint the bad apples.


Red Flags are often right in front of us. If we know what to look for and how to investigate these red flags, we will be better prepared to refute the illegitimate claims.  If used and scheduled properly, investigations can serve a key role in effectively mitigating financial exposure to the Insured.  Let’s take a look at a few red flags and how we can further investigate them.


Red Flag - Example 1


One of the most common red flags is a claim with no witnesses. Questions obviously arise when there are no witnesses or video to substantiate the fact that the injury happened on the clock or at the alleged location.  Did this happen over the weekend before the subject was due into work?  Is this an injury that was sustained somewhere else or in some other fashion?  


A cost-effective way to investigate such a red flag is by completing a full social media analysis.  Get to know your petitioner by taking an in-depth view of his public online postings. 


Don’t be surprised to learn that this is an effective way to easily refute many claims. 


Several months ago, we found disturbing information online about a township worker who provided in-depth detail on his social media account about a bar room brawl that happened two days before his alleged slip and fall at work. His neck pain and concussion were real, but these injuries were not the responsibility of the employer in this situation. 


Red Flag - Example 2


Social Media reviews can provide us with many answers, but often times, we need to dive a bit deeper. For instance, let’s consider another red flag -- seasonal patterns. Does a certain individual always seem to get injured around the same time each year? Could there be a seasonal motive controlling such injuries? If so, it would be wise to perform a full lifestyle investigation, or what we like to call the S.M.A.R.T. Investigation (Social Media Analysis & Research Tool), which, in addition to a social media review, includes a detailed examination of an individual’s property records, business registrations, professional licenses, criminal records, civil records, and more. One might wonder if an individual has a shore home they are retreating to for a summer hiatus. Through property records & database sources this information can be confirmed. Have rumors been swirling that Mr. Jones has a side landscaping business? A detailed review of business records, licenses, and filings can help us confirm if a certain individual is in fact operating a side business. No better time to open up a small business than while you are receiving benefits, right? Not only is operating a side business a violation in a worker’s compensation related matter, but it can serve to be of great assistance when fighting a liability investigation where an individual is claiming lost wages.


Red Flag - Example 3


In a variety of circumstances, surveillance can often play an instrumental role in confirming a certain claim is fraudulent. A great example is when an adjuster receives an anonymous tip! ‘Steve from the Insured saw Joe exercising at the gym’ or ‘a neighbor, Michelle, saw Tom performing extensive home repair.’ I could continue with examples, but I think you get the point. When we receive a tip, we must perform due diligence and properly investigate these matters. Surveillance allows us to gather a full picture of an individual’s physical capabilities. Is Joe bench pressing at the gym with a back injury? Is Tom climbing a ladder and lifting over his head with a bad shoulder? If so, it is critical that you gather these activities on video footage.


Red Flag - Example 4


Similarly, when dealing with a claimant who alleges subjective injuries or exaggerates injuries, it is extremely vital that you investigate these red flags. If a doctor can’t confirm an individual’s psych claim or orthopedic injury, the best measurement can be surveillance.


Also, if an individual exaggerates the claim and states “they can’t do anything,” then it might be time to compare and contrast the allegations to the surveillance footage.


My belief, and my hope, is that this practice will help you filter your claims with more precision. By responding to red flag indicators with strategic investigations, we have helped clients reduce or eliminate exposure in countless cases.


*DISCLAIMER* This newsletter is offered only for educational purposes. The material provided is for informational purposes only and does not constitute legal advice. This newsletter is not offered as, nor does it constitute, legal advice or legal opinions. You should not act or rely on any information contained in this newsletter without first seeking the advice of an attorney.