MVCA Vice President Barbara Hall, with Marine Claims Services, Inc. at the October luncheon.

Congrats to Pot of Gold winners: Maggie Gonzales, of Marine Claims Services, $35...

...and Magda Calderara, of Enterprise Rent a Car, $15.

A modest but engaged crowd turned out to hear David Blinn, of Low, Ball & Lynch, at the October Mid-Valley Claims Association luncheon at Papapavlo’s.

Objective Evidence and Red Flag Clues to Fraud
by Bryan Harrison, Association News Network

“Red flags don’t prove fraud,” stated David Blinn, partner at the San Francisco law firm of Low, Ball & Lynch, “but alert you to the possibilities”. Mr. Blinn shared his experience and knowledge of dealing with insurance fraud cases with the October 16, 2009 gathering of the Mid-Valley Claims Association. From “swoopers & squatters” who create staged accidents, to the oft-exaggerated claim, Blinn emphasized the perspective that “a fraud indicator, or ‘red flag’, doesn’t necessarily mean a fraudulent claim.”

He stated that exaggerated claims accounted for $4.8-$6.8 billion in 2007, a rise from $1-$2 billion in 2002, resulting $995 per household in extra annual premiums. Fraudulent claims effect us all.

Mr. Blinn sited a study by California Insurance Commissioner Steve Poizner on auto fraud that indicated a 25% increase. “It may be safe to assume a similar increase for houses and/or boats,” he stated.

One red flag may be found by examining how many claims people have filed. “They tend to do what they know,” he said. Does all the information on a claim match-up? Was a new policy taken out on a long-owned vehicle? Do you have chiropractic bills that show the same treatment given to multiple claimants? These are all clues, he said, but still not proof.

“It comes down to what is reasonable,” Mr. Blinn stated. “When denying a claim, site the policy language,” he advised. By law, “you have to reference the commissioner’s office contact information when denying a claim,” he further reminded the claims people in the room.

Mr. Blinn stated that much of his work has dealt with auto-related SIU claims, and didn’t prepare data for homeowners, marine, or other types of claims. However, red flags are often very similar, he said.

Again he emphasized that red flags are indicators, not proof, of fraud, that can steer an investigation to gather evidence.

The October MVCA crowd included Charles Gabbani (resting hand on cheek), from CSE Insurance, who was visiting from the Sacramento Claims Association. L-R: James Madallon, Taylor Renovation; Steve Drake (also on SCA Board), from El Dorado Restoration; and Geoff Jolliff, of JM Environmental.

Bror Wingard, of Wingard Construction, walked away from the October luncheon with several prizes.