Crazy insurance tales have been making headlines for decades now. There seems to be no end to the capacity of humans to come up with bizarre creative solutions to secure what they think are easy payouts. Before we get into some of the craziest tales we’ve come across, it’s important to understand what insurance fraud is and why it hurts everyone. In a nutshell, insurance fraud is when individuals or groups commit fraud to extract unwarranted benefits from their insurance policies. The degree of insurance fraud can range from exaggerated claims to events or incidents that are completely fabricated to secure large payouts. This is a serious issue that has a grave financial impact on the economy. Insurance fraud in the US alone costs the industry $308 billion annually. What’s alarming is that around 22% of Americans have admitted to fudging auto insurance applications, making it one of the most common types of fraud. Life insurance fraud accounts for $74 billion in annual losses.  Insurance fraud hurts everyone, not just the industry. To recover the staggering costs of false claims, insurance companies are often forced to hike their premiums, which ultimately pinches everyone.

Here are a few of the most bizarre stories about insurance fraud:

Operation Bear Claw

Four residents of LA were arrested after the California Department of Insurance revealed that they staged a fake bear attack on their vehicles to secure a six-figure payout. The suspects had submitted video footage of the alleged incident to their insurance company, which showed a furry creature entering their Rolls Royce through a side door, leaving scratch marks on the leather seats and door. After scrutinizing the video, the police determined that there was no bear involved, it was a person in a bear costume. Two similar claims involving the same suspects and location, but with different cars, propped up and led to the police searching their home. During the search, the police found a bear costume that looked suspiciously like the bear from the footage. The residents were arrested but the scam cost three companies a collective sum of $141,839.

Food for fraud

This story is probably every restaurant owner’s worst nightmare. In 2020, a 49-year-old woman was sentenced to 18 months in prison after she was found guilty of making fake food poisoning claims while targeting different restaurants. She faked medical records and wrote 12 letters that demanded compensation amounting to $400,000. She was paid over $200,000, however, she was caught and had to spend over a year in prison. It’s not been recorded how she reacted to the food she was served in prison.

Go big and go to jail

The story of Sholam Weiss made national headlines and is one of the biggest insurance fraud crimes committed in US history. Weiss had many co-conspirators who collectively managed to siphon $400 million from insurance companies. The dubious scheme spanned over 5 years, from 1990 – 1995, when the principal victim company was liquidated. A majority of 35,000 policyholders were defrauded in Florida, and many even lost their life savings as a result. Weiss received an 875-year prison term for his 78 counts of racketeering, wire fraud, money laundering, and more.

Fraudster with a familiar new boyfriend

Next is the infamous 2004 Texas case of Molly and Clayton Daniels. Clayton was sentenced to time in prison, however, he was found dead in a burned-out Chevy and the body was burnt beyond recognition. Authorities were able to identify it by Clayton’s shoes and baseball cap. Molly was set to receive the benefit of over $110,000 from her life insurance policy. Over the moon and in love again, she introduced her family to a new boyfriend, Jake Gregg who looked just like Clayton but with darker hair. When investigators tested the charred body’s DNA, it was found that it wasn’t Clayton, but a woman. It was then revealed that Molly had been researching arson just before the crash and admitted to having dug up the body of an 81-year-old woman and placed it in the car. Molly received a 20-year sentence and Clayton got a 30-year sentence, presumably added on to his previous unserved term.

Slip and fall artist

Next is the story of an enterprising 73-year-old grandmother and her 15-year career as a master of slip-and-fall insurance fraud. She would often visit stores across Pennsylvania and New Jersey and would lie on the ground and claim to have fallen over a lamp cord or sidewall crack, in the hopes of getting an easy insurance payout. She would avoid stores with cameras and would generally drop the claim if agents asked too many questions. She had around 50 aliases and used them to get half a million dollars. She was caught at a liquor store when the owner questioned her claims.

The jewelry thieves

Lastly, we have the story of New Yorkers Atul Shah and Mahaveer Kankariya who hired two men, dressed them up in Hasidic jew costumes for some reason, and got them to stage a break-in at their own shop. To cover their tracks, they poured drain cleaner into their security camera to destroy any incriminating footage and then filed a $7m claim with their insurer. The video footage was however salvaged, and the two men were seen removing the jewels from their own safe before the break-in, leading to their immediate arrest.

While reading about some bizarre stories may be amusing, insurance fraud itself is no joke. It is crippling insurers and honest policyholders with high premiums and should be avoided at all costs. At Gonzalez Insurance, we have strict screening processes in place that safeguard us from insurance fraud. Being a smaller business, we are also able to regulate our clients better, which means our premiums don’t have to be hiked up to recover from fraudulent claims. If you’re looking to get a good policy, get in touch.