CFE – Financial Transactions and Fraud Schemes — Question 37

Which of the following is a red flag that might indicate that someone is attempting to commit insurance fraud?

Answer options

• A. A fire loss claim includes numerous personal items and family heirlooms.
• B. The insured made one other insurance claim within the past five years.
• C. A claim is made a short time after a change in policy coverage.
• D. A theft claim includes recently purchased items with their receipts.

Correct answer: C

Explanation

Option C is correct because a claim filed shortly after changing policy coverage can indicate potential fraud, as it may suggest the insured is trying to take advantage of new benefits. The other options, while they may raise some concerns, do not inherently suggest fraudulent intentions. For example, having multiple personal items in a fire loss claim or making one previous claim does not automatically indicate fraud.