What must an adjuster do if they find evidence of fraud during a claim?

When an adjuster discovers evidence of fraud during a claim, it is their responsibility to report this information to the appropriate authorities. This requirement stems from the legal and ethical obligations that govern the insurance industry. Fraudulent activity undermines the integrity of the insurance system and can lead to significant financial losses for insurers, policyholders, and ultimately, the economy as a whole.

By reporting the evidence of fraud, the adjuster is acting in accordance with regulatory standards designed to protect the interests of all parties involved. This action not only helps ensure that dishonest practices are addressed but also contributes to the overall health of the insurance market. Failure to report fraud can result in legal consequences for the adjuster, including disciplinary action from the insurance department.

The options of ignoring the fraud, concealing it from the insurer, or informing the policyholder do not align with the ethical and professional responsibilities of an adjuster. Ignoring or concealing evidence of fraud could lead to further fraudulent activities and damage the credibility of the claims process, while informing the policyholder does not address the need for legal reporting and may compromise the investigation.