IMACC Anti-Fraud Center
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Types of Fraud
Insurance Fraud takes many forms:

IMACC Transparency and The IMACC Standardâ„¢ of Documentation and Ethical Service Delivery Inhibits, If Not Eliminates Fraud.

  • Policyholder Fraud against Insurance Companies
    This fraud involves deliberately causing a loss such as a fire (Arson) or water damage claim. It can also involve faking a theft or even a vandalism claim. Also, it is not uncommon for a dishonest policyholder to attempt to inflate a legitimate claim by what is referred to as "Puffing" a claim. This means adding claimed items that were either not involved in the loss or outright did not exist prior to the loss.
  • Policyholder Fraud against the Restoration Contractor
    This type of fraud takes the form of refusal to pay for properly delivered services by faking complaints, alleging improper or unreasonably priced repairs, or by insisting that other non-related damage or remodeling work be done at no additional cost if the contractor wants to have the insurance claim payment check endorsed.
  • Contractor Fraud against the Insurance Company
    In this type of fraud, the contractor over-scopes and/or overcharges for work performed on behalf of the claim. In some cases, the policyholder is completely unaware of the overcharges since they are not experts in such matters. In some cases, the contractor and policyholder work together to present a fraudulent claim to an insurer.
  • Contractor Fraud against the Policyholder/Property Owner
    Not all restoration contractors are ethical. Many lack the credentials and certifications necessary to do a proper job. This is the milder form of such fraud since the contractor is simply under-qualified to do the job. A more serious form of contractor fraud takes the form of failing to do all the work as estimated and approved by the adjuster and not openly reducing the bill accordingly. Some restoration contractors deliberately charge amounts that are not agreed upon by adjusters, placing unpaid amounts in collection and even foreclosure. Unwary property owners may find themselves losing their homes or places of business.
  • Adjuster/Contractor Fraud
    Regrettably, some claim adjusters foster unethical relationships with restoration contractors who either convey payments to the adjuster for work with inflated estimates, or provide costly entertainment or services in exchange for jobs. This is why most insurance companies do not want their adjusters recommending contractors to policyholders. Not all adjusters who recommend a contractor to a policyholder with a loss are on the take, but pushing a specific contractor is the necessary first step to such a fraudulent action. Certainly, most property owners are at a loss to know who to call upon when they experience damage to their property and most adjusters know which restoration contractors are the best in a given area. IMACC believes the most ethical method to avert potential conflicts of interest is to rotate referrals to qualified reputable contractors in a way that does not make the referral directly through the adjuster.