I'd give an arm and a leg ...
Ted Tafaro, president and CEO of Exceptional Risk Advisors, a specialty insurer for high-end clients based in Mahwah, N.J., recalls hearing this pre-Internet claims story that beats the others hands down. It was shared with him by veteran adjuster Joe Healey, rumored to be the inspiration behind the insurance investigator played by George Peppard in the 1970s TV series, "Banacek."
"Joe was engaged by an AD&D (accidental death and dismemberment) carrier that had suspicious, chronic dismemberment claims in this one area of the South," Tafaro says.
AD&D policies, he explains, usually have a schedule: You lose one arm and one leg, or two legs, and you get 100 percent of the benefit; lose one arm, you get 25 percent; loss of a single digit pays 5 percent; and so forth. A $100,000 policy might pay $5,000 on a lost finger.
Another insurer was seeing fishy claims in the same region.
"So what he figured out is, there was a clan of guys down there that would buy small AD&D policies from, like, 28 different insurance carriers, and they would sever a digit here, a digit there, and collect 28 dismemberment benefits -- all on the same lost digit," Tafaro says.