This post is part of a series sponsored by Cotality.
Crime flourishes in chaos, making natural disasters an ideal background for insurance claims fraud.
It is convenient when ash stops falling after a wildfire or hail stops falling and retreats after a severe back-to-back storm – seductive, even tempting – for some homeowners, an exaggerated or thorough fabricated insurance claim.
According to the National Insurance Crime Agency, fraud accounts for 10% of claims paid after the disaster. Total fraud, insurance companies and indirect policy holders, $45 billion per year. And the situation is getting worse. Not only is the disaster itself becoming increasingly unpredictable and destructive, but the AI tools available on Peoples’ fingertips also make it easier to create fake but real claims documents.
Perpetrators often believe that fraud is a harmless crime. They think some harmless lies are worth making sure they say there is really no damage payment that occurs. Maybe the storm happened before they covered it.
Perpetrators often believe that fraud is a harmless crime. They assume that some small lies are worth mentioning, so they can make sure there is no damage that occurs when paying. Maybe they think the insurance company has no way to tell the hail to hit the roof before they actually get coverage.
What many people don’t realize is that the increasing number of fraudulent claims over the past decade has made it increasingly difficult for insurers to provide extensive, affordable coverage.
In order to close the growing insurance gap, insurance providers must first be able to identify and combat insurance fraud.
Insurance fraud is the first obstacle to clear
Many factors that exacerbate the ongoing insurance crisis are beyond control. For example, no insurer can prevent any natural disasters that have paralyzed the U.S. in recent years.
But fraud is another story. Claim fraud is the main driver of the insurance crisis and can be resolved immediately by a single company. Positive solution is the most direct and influential way for insurers to position themselves as providing a wider, affordable coverage, even in high-risk areas where fraud is rampant.
Fortunately, it’s almost as easy as saying it’s about. Fighting claim fraud doesn’t require more boots on the ground; insurance companies only need the right digital infrastructure.
As the disaster claims pour in, insurers need systems to quickly determine when and where the damage occurs. They also need to shorten their life cycle claims and maintain the most experienced claims professionals when the digital outline is not enough to review suspicious claims.
With forensic data and digital automation solutions, insurers can establish claims verification and verification workflows that are impenetrable in fraud.
How to build an Ironclad claim program to stop claim fraud
There are several ways to arm your claim procedures into fraud:
- Verify storm-related damage using trusted forensic weather data
- Automated verification process
Filter fraud using forensic storm data
Predictive information is crucial to the destructive dangers of preparation for entry. But this is Forensic Weather data reveal the difference between the claimed claim and the reality of the actual weather event.
For example, due to the dispersed, frequent and increasingly destructive nature of severe convective storms, it is necessary to determine exactly when and where to reduce the destructive hail. It is also important to determine the speed of the wind involved. The average hail claims total thousands of dollars, which is crucial for insurers to ensure that only the property with proper insurance is paid.
Forensic data-driven solutions such as Cotality™ Weatherify validate insights that professionals need to accurately and confidently distinguish between legal and potentially fraudulent claims. VERAIFY™ provides more accurate footprints of hail, wind and lightning storms, allowing insurers to clearly distinguish past and current hail events. This reduces the ability of a bad actor to successfully submit fraudulent hail claims.
Verification uses a convergence of hazard verification methods to confirm the size and location of the storm impact, thereby generating these insight reports on the first loss notification. The instant difference between valid and fraudulent claims reduces the risk of fraud. It also promotes more effective claims handling.
Automate the verification process without compromising accuracy
The longer it takes an insurance company to resolve a claim after a natural disaster, the greater the possibility of claim fraud.
COTALITY™ Claims Validate™ uses the Rules Engine Evaluation Documentation to shorten the life cycle of the claim life cycle. When the estimate does not meet the conditions for pass-through processing, the system flags vary and prompts human review.
Since the verification rule engine is customizable, any insurer can customize the system based on its unique fraud reality. For example, if the carrier knows that fraud is more likely to be fraud in certain areas or scenarios, then Cotality can configure the system to require a higher confidence score in these cases.
When shortening the claim life cycle and reminding insurers that when claims require human review, Validate™ ensures that there is no evidence of fraud until policyholders receive payment.
Today’s insurance fraud action
The insurance crisis requires action, and the most logical starting point is to check for fraud.
Cotality’s Verification™ and Validate™ products are designed to reduce fraudulent claims.
Since fraud is expected to get worse, successful claim actions depend on identifying and frustrating deception.
©2025 Cotality. all rights reserved. While all of the content and information is believed to be accurate, the content and information is provided “as is” with no guarantee, representation, or warranty, express or implied, of any kind including but not limited to as to the merchantability, non-infringement of intellectual property rights, completeness, accuracy, application, or fitness, in connection with the content or information or the products referenced and assumes no responsibility or liability whatsoever for the content or information or the products referenced or any reliance is there. COTALITY™, the COTALITY logo, Beusher Buffer Bounds™, Verify™ and Validate™ are CoreLogic, Inc. Trademark of D/B/A Cotality or its affiliates or subsidiaries.
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