Stories From the Street
By Dennis Parker, Director of Fraud Prevention, Innovation Group
[Dennis Parker has over seven years experience managing an insurance fraud unit in the South Central United States and seven years experience working for software companies developing strategic solutions for insurance fraud. Formerly he spent 18 years as a law enforcement officer in a variety of jurisdictions including Houston Texas and the US Air Force as an AFOSI agent.]
So there I was… as an insurance fraud manager I found myself out of the office on behalf of an adjuster to check the damages reported by one of our “insureds” who had t-boned a Jaguar. Our insured vehicle was a black Honda Accord and it was at a storage lot.
When I arrived at the shop I saw that it was a large indoor warehouse with the main door open and no one out front. As I walked by the open door I noticed scores of vehicles being stored inside, all damaged - some totaled. It was odd to see these vehicles kept indoors, so odd that I began to suspect that perhaps some of the less damaged ones were unrecovered stolen vehicles so I began jotting down VINs as quickly as I could before someone spotted me. I got about five of them, one from a white Corvette that was demolished and sitting on the frame.
I went inside the office and finally found someone who showed me the totaled Honda Accord. Sure enough the damage was severe and appeared to come from a direct front impact. Oddly, there was no damage indicating the car it struck was in motion, all damage appeared to go straight towards the rear of the Accord. No big deal, I took some photos and departed. Once back at the office I checked all of the VINs and none were listed as stolen, so I chalked that one up to an over-active suspicious nature.
I found out that the adjuster had met with the owner of the Jaguar and settled the claim. The adjuster told me later that the owner had met him at the body shop in a very angry mood. He admonished the adjuster about being fair and said if he was treated fairly about settling the claim for the totaled Jaguar then he wouldn’t be inclined to file injury claims for himself and his three minor children who he said were in the car. The Jaguar had been hit in the driver’s side so hard it was bowed like a banana - a hard enough hit to match the Accord severity for sure.
The adjuster was happy to settle the claim for the Jaguar at the top of the Blue Book estimate knowing that he could close four injury claims at the same time. He paid the owner of the Jaguar close to $20,000 and went back to the office a hero.
My curiosity was still up though. I was able to do some checking on the title history of the Jaguar and discovered that the person just paid by the adjuster was not the titled owner of the Jaguar - it was titled to a leasing agency in Florida. A few phone calls and I discovered the vehicle had been purchased four days before this claimed accident occurred and it had massive damage to the driver’s side when purchased.
A further check of the history of the Jaguar owner revealed several other accidents. One which occurred a year ago had some familiar looking pieces of data: The opposing party in that accident lived in the same apartment as the one occupied by the person we insured this time.
I met with the owner of the Jaguar and explained to him what I had discovered. In exchange for not going to jail he agreed to pay our $20k back. Our insured could not be located and since there was no collision coverage on his policy, he got no money.
Three months later I was asked to take a look at a stolen vehicle claim. The owner’s name seemed familiar, as did the description of the vehicle. After a few minutes I remembered; the owner’s name was one I had seen when I checked the VINs from the indoor storage lot. The “stolen vehicle” was a white Corvette — same VIN.
I contacted the local police department’s auto theft task force and informed them. They raided the shop a few days later and found seven stolen vehicles (or parts) and arrested eight people.
Automated scoring of claims and comparison of the entities and identities within the associated data to determine who’s who and who knows whom (AKA identity or entity resolution) is a critical component to detecting insurance claims fraud. These events were found by pure luck and an over-active suspicious nature. I’m certain that it was only one in a thousand that had gone through unnoticed
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