The frauds that the insurance industry usually see come from people who started out honest. For instance Binky LaRue really did have a robbery. When he reported it, he found out how easy a small insurance claim was to get paid. "Oh, your television, VCR and computer were stolen in a break in? Why, no problem, Mr. La Rue, we'll cut you a check today." He learned that many insurance companies are really "in" to customer service, and in short order the check for $1243.18 arrived in the mail to cover the costs of replacing the missing items. Everyone was happy.

Then Barry Bungalow (Binky's next door neighbor and very closest friend) got fired from his job. Months later, when he was nearing the end of his unemployment money pie, Barry decided to have a yard sale. Just before the sale, his garage caught fire and burned to the ground.

Eleanor Radloff, Binky's friend and roommate, was running low on money, so she brought Barry his slippers, rubbed his poor sore back, kissed him a few times and then gently told him that she was going to bring a few things over to his garage before the adjuster arrived. "I can't sell this junk, may as well let the insurance company pay for it. All I've got to do is rub a little bit of soot on it, and we can say that it was yours and it was burned in the fire!." What a plan. 

About a year later, Barry Bungalow had a water claim. Not only did he lose boxes of collectibles that had been stacked on his basement floor when it flooded, he also lost his collection of 45 rpm records, about 400 hard cover books, plus a huge amount of his kid's outgrown clothes. Barry had dollar signs in his eyes. He called up Binky and said, "hey, c'mon over and give me some pointers, pal!" 

By the next morning, on the day that the adjuster was supposed to get there, Barbette, Barry's wife, developed dollar signs in her eyes, too. "Hey, Bear. Remember this ugly Persian rug that your parents bought for us? Well it's the ugliest rug I've ever seen." Barry winced. "But pumpkin, that rug is worth nearly $35,000." Barbette replied, "Fine, then I will soak it in water until it's waterlogged beyond repair."

Using the bathtub, they soaked the rug and then carried it down into the flooded basement. Then they carried their old television set downstairs, additional boxes of their clothes, and even a few ugly paintings.

Alfred Adjuster carefully did all of his work, and then nailed Barry and Barbette in a series of lies. Instead of receiving a check for what they really lost to water damage, they received only jail sentences.

Such people, until they get caught, are called serial insurance claimants. They start with a little claim, usually an honest one, and then gradually build up to bigger schemes. Many decide to study up on additional fraud scams; expanding their horizons.

In another type of criminal behavior, fraudsters like to sell fake art and fake collectibles on the Internet or E-Bay. Watch out what you buy via a photo; there is a tremendous amount of misrepresentation out there. Photos are easily altered with some relatively cheap software programs.

Sometimes people whom you think are wealthy become insurance fraudsters to maintain a lifestyle they have become accustomed to - even after the money is gone.

It is relatively simple to report an expensive piece of jewelry gone and then file a claim with the insurance company. One case we know about involved a Hollywood movie star who "lost" her ring on a lunch counter at JFK airport. In her sworn testimony under oath she insisted she had no money trouble and she had simply accidentally "misplaced" her quarter million dollar ring. After the investigation, we learned that she had a $246,000 judgment filed against her by a major financial institution just a week before her ring was lost.

The very bottom line of Art and Collection fraud is that it is part of the Homeowner's line of coverage. As such, all those dollars paid out on hokey claims are the REAL reason that you are not seeing a policy premium reduction.

You see, the crooks are stealing YOUR money. Again, it's up to you to help STOP fraud.