Your Insurance: You Know What to Expect

Fraud: ...suppression of truth;...concealment of that which should be disclosed...

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The Spiral of Fraud

by Antone P. Braga

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As insurance policies became higher priced, more company controlled and dictatorial, policyholders increasingly turned to padded and invented claims. Or was it the other way around? No one really knows for sure, but they do feed on each other and it does not matter which came first. It may appear on the surface that enforcement of, and acquiescence to, assumed, dictatorial authority has produced no effect. However, there is an ever increasing cost being exacted on both sides.

The disappearance of a sense of responsibility is the most far-reaching consequence of submission to authority.
--STANLEY MILGRAM

Fraud comes dressed in different clothes. It can be a padded claim, arson for profit, or insurance fraud ring. It can also be misleading advertising, or denying information to both sides, which is also a form of fraud. If an adjuster is trained to act according to misinformation and nonexistent authority, that adjuster can come to feel righteous in that misinformation and entitled to that authority. The same is true for policyholders who have given up their responsibility and authority, and have come to feel entitled to lay their problems at the feet of insurance.

We hear mostly about misrepresentation and fraud concerning policyholders, and undoubtedly it takes place. Conspicuously missing from the entire insurance transaction is any mention of possible criminality of the insurance company or its agents, adjusters, investigators and experts who might participate in collusion, provide misinformation, conceal policyholder rights, conceal facts, understate policyholders' losses, and negotiate claims in bad faith. They are after all, people--not saints.

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