Fraud is generally defined as an act done with the intent to deceive or misrepresent others in order to attain or secure some unlawful gain or deprive a victim of a legal right. Different courts, states, and bodies of law throughout our country have their own unique causes of action based in fraud, or where fraud is the primary allegation.

Fraud (on behalf of insurance companies) is more common than people realize. As recently as last week, California’s Insurance Commissioner started an investigation into Aetna Insurance Company1 after Aetna’s former medical director admitted under oath that the Insurance Company would deny insurance coverage without ever actually looking at a patient’s medical records. This was Aetna’s custom and practice, as admitted by its former medical director.

This type of fraud is not exclusive to Aetna or medical insurance – this is common in property and disaster insurance as well.

In the aftermath of Hurricane Sandy (2012), we saw this all too frequently. In fact, this issue was so problematic that the New York Attorney General indicted several NFIP flood insurance company engineers and engineering companies for fraudulently altering engineering reports. The flood insurance companies used the fraudulently altered reports to support their denial of property owners’ proper claims for covered flood damages. For example, the insurance company engineer reports originally blamed the flood water for causing severe structural damage to the homes, but the reports were changed to say there was no structural damage, or the flood water did not cause the damage. The changed reports were used by the insurance companies to significantly reduce the claim payout, or outright deny the claim.

This issue is so common and pervasive that insurance industry insiders have blown the whistle on their former insurance company employers. Back in 2006, the Rigsby sisters, who were both former claims adjusters for State Farm, blew the whistle on their former employer and insurance industry titan State Farm. The Rigsby sisters said that after a thorough investigation of property owners Hurricane Katrina claims they frequently would reach the conclusion that the property damage was caused by wind (which would be covered by the property owner’s insurance policy with State Farm), but State Farm would change the conclusion and say that the damage was flood-related, and therefore not covered under the policy. State Farm would entirely disregard the conclusions reached by their licensed adjusters, and fraudulently change the conclusion to avoid payment on the claim. The jury determined that State Farm owed over $4 million in damages related to this fraud.

Insurance Company fraud is not as uncommon as people may think. If you believe that you are a victim of this type of insurance company fraud, you should contact an experienced insurance attorney.
1 February 12, 2018, California Department of Insurance Press Release, available at (last accesses February 19, 2018).