Insurance payouts pocketed, though no accident occurred ... A shocking scheme used to deceive insurers 16 times [Filing False Claims]

[Financial News] One day, an accident report came in to an insurance company. It said that A, the policyholder, had been driving a passenger car on a road in Wonju, Gangwon Province, when he was involved in a single-vehicle accident. He went to a hospital that same day and received outpatient treatment. Ten days later, he claimed an injury treatment benefit. The claim seemed plausible, with no procedural problems, but the whole thing was a lie.

Ahad not actually been injured in a traffic accident. In fact, there had been no accident at all. He had made up an event that never happened and even sought medical treatment, all to get insurance money.He had planned the location and circumstances of the accident in advance and gave a statement exactly ashe had planned.
The next day, he went to a hospital and received a diagnosis of ‘sprain and strain of the cervical spine.’ He received outpatient treatment that day and obtained a medical bill. Based on this, he claimed the automobile accident injury treatment support benefit and, three days later,received 500,000 won from the insurer.
After his plan succeeded once, he became bolder. For about two years afterward, A repeatedly reported fictitious accidents, sought treatment at hospitals and then filed insurance claims. He also used a tactic of canceling the accident reports he had filed under his existing auto insurance after collecting the payouts.
Using this method, the insurance payouts Afraudulently obtained in 16 instancesamounted to a total of 7.6 million won. Although there had been no actual accident or injury, he deceived the insurer by making it appear on paper that he met the requirements for an insurance payout.

The court of first instancesentenced A, who had been indicted on insurance fraud charges, to a fine of 4 million won.he had planned.
A took out driver and accident insurance policies one month before filing a false accident report. Both policies included an ‘automobile accident injury treatment support benefit’ rider that paid out if the insured was injured in a car accident and received an injury grade specified in the policy terms.
A zeroed in on this point. Regardless of whether he had actually been injured,he exploited the fact that all he needed was to obtain an ‘injury grade’. He repeatedly used the sequence of reporting an accident, receiving hospital treatment and filing an insurance claim. In effect, he targeted a loophole in the claims review process, which focused on submitted documents rather than verifying whether an accident had actually occurred.
Even when there had been no actual traffic accident or no one had been injured in one, he filed an accident claim under his auto insurance, received treatment at a hospital and obtained a medical bill to satisfy the requirements. From the insurer’s perspective, there was no basis to reject the claim.
Some claims, however, went unpaid when the insurer investigated the accidents and denied payment.

[email protected] Kim Tae-il Reporter