Insurance is a contract set between the insurer and the insured where the insurer compensates the insured against losses or damages from an unknown event. Insurance fraud is a type of fraud where deceitful claims are made knowingly by a person in an attempt to get a benefit or advantage to which he/she is not entitled or authorized. This is an illegal act that results in exploiting an insurance contract. Insurance frauds are committed during the transaction of the insurance by the individuals applying for insurance, policyholders, third-party claimants or by professionals or technicians who provide services to the claimants.
There are mainly two types of insurance frauds- soft insurance frauds and hard insurance frauds. In soft insurance frauds, the insured becomes opportunistic to the legitimate claim. For e.g. when the insured’s vehicle meets with an accident and claims that the injuries are more severe than they are actually in order to get a bigger settlement from the insurance company. In hard insurance frauds, the insured premeditated the incident that would help him claim the money from the insurance company and thus, benefiting him.
Different types of insurance fraud involve health insurance, car insurance, home insurance, life insurance, workers compensation insurance and insurance company fraud.
Figure 1 - Types of Insurance Frauds
Forensic experts examine the physical evidence that is associated with the case with the help of their in-depth knowledge and experience in order to prove whether or not the claim is fraudulent. Scientific evidence is gathered and submitted by the experts which shows whether or not the damages or the events described are consistent with the claimants. In special cases, experts attend the Court of Law to prove their opinions/reports regarding their observations.
The major types of automobile insurance fraud involve premeditated car accidents, false claims of injury, false claims of stolen vehicles, false reports of accidents post purchasing policy, false claims for damages that pre-existed, claiming that the person was driving at the time of the accident who is not under the oath of policy or coverage.
The witness of the scene if available can narrate the version of events that took place at the scene of the crime which would initiate the investigation process. In most cases, the statement of the witness is taken as evidence for further reference. Further, in cases of arson, information regarding the fire brigade and police that were involved in protecting the crime scene is assembled. Interpretation of the CCTV footage is another means of digital evidence that is utilized by the experts and analyzed during the investigation process.
The main motive for the investigation of arson cases is to determine the cause of the fire, in addition to the origin of fire. Moreover, fire patterns which are left due to the ignited fire and electrical evidence such as the wires are carefully examined for any traces of evidence which will lead the investigation to a conclusion. Examination of the location where the vehicle was damaged and keys are also evaluated in fraud insurance cases of cars to check whether the damage is consistent with the events described by the claimants. In rare cases, reconstruction of the crash is done to see if the damages are consistent again.
The three components of a fire triangle are fuel, heat and oxygen. All the three components must be present at the same time for the fire to occur. If one of these elements is missing or is removed, the fire will be extinguished.
Figure 2 - Fire Triangle
A car is comprised of mechanical and electrical components. In addition, there are frictional components such as wheels and brake pads and flammable liquids. The major causes of fire that might occur in vehicles are leakage of fire, collision of vehicles or accidents, bursting of tires, electrical failure, overheating, loose wires, use of substandard components, oil spill, loose/missing oil filler caps, worn out hoses in engine, improper servicing and technical faults which include empty coolant, engine oil etc.
Vehicles may catch fire mainly in two ways- intentional or accidental fire. In most of the insurance fraud cases, vehicles covered under the comprehensive insurance policy is set into fire by the owners intentionally to claim and receive the money from the insurance company. A vehicle can be divided into three regions on the basis of origin of fire which are engine compartment, occupant compartment and the trunk or cargo compartment. These areas might have burn patterns like the lines of demarcation or V-shaped burn patterns which points towards the point of origin.
The area of origin is determined by distinguishing between the area with severe damage and the area with lowest level of severe damage.
Careful examination of the windshield may also provide substantial evidence as to where the fire has originated- whether in engine or passenger compartment. The windshield will show burn patterns at the bottom and leaves the top intact in case if the intensity of fire is high in the engine compartment whereas, if the fire originated in the passenger compartment, the top of the windshield will be affected leaving the traces of burn patterns.
The characteristic pattern of char results from flame, smoke or heat while intersecting a horizontal or vertical surface such as a wall, ceiling etc. When the fire burns up, a V-shaped pattern is formed- which is the most common type of fire pattern found in any type of crime scene. A radial burn pattern is another type of pattern often formed on the doors and fenders of the vehicle. Analyzing and interpreting these fire patterns can tell the investigator about the flow of fire.
Figure 3 - Burn patterns formed due to fire on vehicles
The examination of the scene of the crime is important to know if the vehicle is moved from the primary location or not. The effects of burning will be visualized in the surrounding areas as well. In addition, comparing the area beneath the vehicle and the soil surrounding the vehicle will aid to determine if the damage is alleged or not.
The wires collected from the affected vehicle are subjected to microscopic analysis to determine if the fire is caused due to a short circuit. The common reasons for the occurrence of the short circuit include overcrossing of wires, low quality of wires, extra fitting of devices, a loose connection of wires, wear and tear of wires, improper functioning of batteries, improper servicing etc.
Visual examination of the crime scene photographs, traffic videos, CCTV Footage etc. is carefully observed and interpreted further to the determination of cause and origin of the fire.
Fig sure 4 - Prevention of Insurance Frauds
Insurance Fraud is increasing day-to-day which indeed leads to an increase in the cost and premium of the insurance companies. Therefore, proper risk management should be framed in order to minimize the number of frauds. A thorough and detailed investigation of the insurance fraud needs to be carried out which includes the proper collection and analysis of evidence in addition to unbiased interviews with the witness. In the end, a detailed report regarding the findings with proper documentation showing the steps of investigation and summaries of the interviews conducted will show the Court whether the allegation of fraud was substantiated.
To learn more, visit the Sherlock Institute of Forensic Science India where the team of expert professionals and certified faculty provides you with a great opportunity to learn forensics by attending different forensic events organized from time to time. Also, you can learn by registering yourself in forensic courses and training programs offered by SIFS India both in online and offline mode. You can also visit our YouTube channel for all the events recoding.