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COVID Scams Insurers Need to be on the Lookout for

COVID-19 has had a significant impact on the economy, our businesses, and our livelihoods. As revenue and personal income continue to be choked out by shuttered businesses and stay at home orders, some may be tempted to make a quick buck through insurance scams.

In desperate times, false claims may seem justifiable in the wake of losing a home or business, bankruptcy, and leaving families and employees high and dry. Insurers must be diligent in fending off fraudulent claims.

Home scams

As homeowners are no longer able to afford their mortgage payment and foreclosure seems imminent, a spike in fraudulent claims is inevitable.

Keep an eye out for claims that are filed right before foreclosure or just after a new policy takes place. Increases in policy limits by homeowners who don’t have the income or possessions to support the coverage are a definite red flag.

  • Arson - homeowners may be willing to torch their own homes or even ‘hire for fire’. Those targeting garages or kitchens may be trying to collect without raising suspicion.
  • Flooding - it wouldn’t take much to break a pipe and leave for the weekend, resulting in major flood damage and a good reason to file a claim.
  • Infestation - new renters may be willing to ‘hire’ bed bugs, mice, or other rodents to terrorize their new apartment, filing a claim after a month or so of poor living conditions.

Vehicle scams

Fake thefts and arson could be a real consideration for drivers who are falling behind on payments or who are desperate for an influx of cash. Especially those who may have purchased above their budget and suffered a loss in income.

Second family cars, now rendered unnecessary by COVID quarantine orders, may seem a lot easier to give up, making some desperate enough to consider the risk.

  • Organized crime - criminal enterprises may even seek to make a business out of it. Staged collisions or vehicle disposal would make it easy for drivers to make false theft claims. Crooked auto repair owners may even be willing to help total cars or inflate damage for a cut.

Luxury lifestyle scams

All the luxuries of a pre-COVID lifestyle may be the first to go - boats, motorcycles, RVs, expensive jewelry, and home entertainment. Theft, fire, wrecks, and more could be an easy way to offload some of these items in exchange for a bit of cash.

Keep an eye out for an increase in coverage prior to submitted claims as this may be a red flag for a fraudulent claim.

Business scams

COVID-19 has the potential to put many companies out of business. Those owners willing to do whatever it takes to prevent that from happening may fall victim to the temptation of filing fraudulent claims. Especially those who may not have the business interruption coverage to support them.

Arson, theft, inventory spoilage, water damage, vehicle collisions including injury. There are many opportunities for businesses to make a false claim.

  • Workers comp - employees who are expecting to get laid off may be willing to file pre-existing non-work injuries or even fabricate one altogether.

Healthcare scams

Clinics may be tempted to make false claims to boost revenue. The push for telemedicine through quarantine only makes it easier to exploit the system. Providers may consider creating false claims, up-charging treatments, or attempt to benefit from unnecessary or duplicate services.

Beware & prepare

It’s important for insurers to be ready for the wave of fraudulent claims coming from a post-COVID world. Having adequate staff to handle and investigate claims will be crucial in thwarting them.

US Claim Solutions is here with investigators who have handled fraudulent claims just like these. Our team provides extensive knowledge and experience to help you minimize the risk of fraud.

We’re here to service claim needs 24 hours a day, 7 days a week. Email us at or give us a call at (888) 701-1153.



Written by Greg Church

President, US Claim Solutions

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