Strange coincidences are par for the course for those working in the insurance business. One day, a woman might take out a $1 million life insurance policy out on her husband only to have him mysteriously pass away the next morning.
Another day, someone might take out an expensive homeowners insurance policy only to have their home burst into flames that evening.
Other times, someone might slip and fall in a business only to seem all-too-ready to talk financial negotiations.
When things seem strange they usually are. Another way of putting it is: “when things seem odd, it’s usually fraud.”
The Wex Legal dictionary defines insurance fraud as “any duplicitous act performed with the intent to obtain an improper payment from an insurer” and can include any deliberate deception performed by or against an insurer for the purpose of financial gain.
Insurance fraud can come in many forms, including car insurance fraud, home insurance and renters insurance fraud, life insurance fraud.
These break down into several types: application fraud, claims fraud, forgery, and phony policy fraud.
Application fraud involves providing incorrect information on a policy application. Claims fraud involves defrauding by offering a false claim.
Forgery can involve changing the beneficiaries on a policy or taking out new policies without the owner’s knowledge. Phony policy fraud is what it sounds like–fake insurance policies sold by scammers, often demanding cash.
Insurance fraud costs consumers more than $80 billion per year and raises the insurance premiums of the average American family by $400 – $700 per year. Though many people think it, fraud is not a victimless crime.
In fact, 1 in 30 of all insurance claims made in the world are fraudulent according to the Reinsurance Group of America’s 2017 Global Claims Fraud Survey.
With those numbers, we’ll be looking twice next time our neighbor takes that policy out on her husband. Here’s a look back at the 3 crazy cases of insurance fraud.
- John Darwin, AKA “Canoe Man”
John Darwin is one of the most infamous cases of recorded insurance fraud, even inspiring an entire BBC documentary chronicling his elaborate hoax.
In 2002, UK resident John Darwin faked his death, staging a canoeing accident to collect on his £25,000 life insurance policy. His wife, Anne, used the death benefit payout to pay the couple’s £135,000 mortgage.
An extensive police search for Darwin’s body in Seaton Carew, UK, yielded only the wreckage of his canoe and a broken oar.
For five years, Anne corroborated the insurance hoax to police and even to the couple’s children. Darwin secretly lived between his home and a neighboring property the entire time, even taking a 2004 trip to Cyprus with his wife.
The couple planned to escape to Panama in 2007 and were nearly successful. Anne sold the couple’s home but a change in Panamanian visa laws required their assumed identities to be verified by UK authorities.
Realizing the jig was up, Darwin turned himself into police in 2007. He claimed he suffered from amnesia and could not recall the past five years of his disappearance.
Darwin was arrested on the spot and charged with insurance fraud and falsification of official documents. Anne was arrested the next day.
The couple were convicted of fraud in 2008 and sentenced to more than six years in prison. Today out of prison, the couple is reportedly still working to repay their court-imposed £679,073 debt.
2. The Cooperman Art Theft Hoax
In 1999, Beverly Hills opthamologist Steven Cooperman was convicted of insurance fraud.
The renowned doctor and art collector had amassed a fortune in priceless original artworks and orchestrated an insurance scam so professionally that the Los Angeles Times called it “nearly a masterpiece.”
In 1998, Cooperman had been indicted by a Los Angeles federal grand jury for conspiring to steal two original paintings: one by Picasso and another by Monet.
The twist? They belonged to Cooperman himself. The scam would have netted him a cool $17.5 million–if it had worked.
When Cooperman loaned the two paintings in 1991 to the County Museum of Art, they were insured under a blanket policy and were left unappraised. The actual value of the two paintings totaled $1,757,000.
Cooperman filed a loan receipt estimating the two paintings at $12.5 million, securing a policy from the Huntington T. Block insurance brokerage, which was underwritten by Lloyd’s of London and Nordstern Allgemeine Versicherungs, today a subsidiary of Axa Group.
In 1992, a house worker at Cooperman’s home reported the paintings missing to police. Cooperman’s insurers refused to pay up, claiming he had overvalued the paintings.
Cooperman countered by filing a lawsuit for “bad faith by the underwriters.” The insurers settled out of court for $17.5 million.
In 1997, the paintings were discovered in a rented storage locker, provided to the owner of a locker by a friend and former partner of Cooperman’s, James P. Tierney.
Testimony led straight back to Cooperman, who was convicted of fine art insurance fraud and sentenced to three years in prison.
3. Isabel Parker, Queen of the “Slip and Fall” Scam
Gambling grandma Isabel Parker, a 72-year-old New Jersey woman, was responsible for orchestrating more than 49 “slip and fall” scams over her 7-year career in insurance fraud career spanning 1993 to 2000.
Parker’s crime spree took her to numerous department stores, supermarkets and liquor stores across three states: Pennsylvania, Delaware, and New Jersey.
Her modus operandi remained the same in every situation. Parker would pretend to fall on the premises, would receive aid from nearby shoppers, and would later file an insurance claim with the insurers of the property owners.
Parker was successful in her scam, racking up more than $500,000 in claims according to a joint complaint filed by prosecutors in Pennsylvania and Delaware at the time of her arrest.
She pleaded guilty in a Philadelphia court in 2000 to eight counts of insurance fraud, six counts of forgery, six counts of theft by deception, and other charges and was sentenced to a mere 12 months probation.
Remember these crazy cases of insurance fraud the next time your neighbor’s priceless Monet goes missing–or if your neighbor goes missing.
For all your real insurance claims, you can trust your insurance broker here at Frontlight. When times are dark, we’ll light the way.