What is Insurance Fraud?

Insurance fraud is not a highly visible crime, but an extremely costly one. In fact, insurance fraud is the second most costly white-collar crime in America (tax evasion being the first).

Insurance Thrillers; Sinister Mysteries Centering About Insurance Frauds
Insurance fraud is any activity in which people use fraudulent means to obtain payouts from insurance companies. Industry organizations suspect that as many as 10% of insurance claims may actually be fraudulent in nature, demonstrating how common insurance fraud can be, and many fraudulent claims are never firmly identified, causing large losses for the insurance industry as it pays out on such claims. Consumers are impacted directly by insurance fraud even when they don't commit it, because insurance companies are forced to charge higher premiums to compensate for funds they lose due to fraudulent activity.

Insurance fraud costs consumers approximately $150 billion a year in damages, leaving the average family paying a minimum of $1,000 a year in higher insurance premiums and costs of goods and medical services.


What could be a reson for insurace fraud?

Car, life, health, and property insurance can all be subject to insurance fraud. In soft fraud, people simply exaggerate an existing, legitimate claim. For example, a driver involved in a car accident might claim that damage to the windshield was caused in the accident, even though it wasn't, forcing the insurance company to replace the windshield. In hard fraud, people actually make up a situation which would result in an insurance payout, either entirely on paper, as in the case of a medical provider who submits claims for services which were never provided, or in reality, as in the instance of someone who burns down a home to get an insurance payout.


Insurers have been struggling with fraud since they opened for business. A number of nations have laws in place which provide specific penalties for insurance fraud, making it a potentially dangerous activity to engage in, and many nations also support insurance company investigations with law enforcement investigations which are designed to identify and put a stop to fraud.

how to tackle insurance fraud?
Tackling Insurance Fraud: Law And Practice (Practical insurance guides)


how to claim on insurance fraud??
Putting a claim on insurance fraud. (Investigations): An article from: Security Management