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Insurance Fraud

The Insurance Research Council revealed some alarming information obtained from a recent survey regarding types of insurance crime that is considered “acceptable” by an unusually high percentage of the public. These types of insurance fraud include the following followed by the percentage of those surveyed who felt that it was acceptable:

o Increasing the claim to cover the deductible – 40%

o Increasing the claim to cover the premiums paid – 36%

o Including defective or obsolete appliances on a lightning claim – 29%

o Listing adults as main driver of a car being driven by an under age driver – 20%

o Omitting accidents/tickets from an insurance application – 14%

o Continuing medical treatment to increase the value of a claim – 11%

o Pretending a hit-and-run accident occurred to submit a claim – 7%

o Abandoning a car and reporting it stolen to the insurance company – 6%

o Reporting an injury at home as work related in order to collect workers’ compensation benefits – 10%

o Cooperating with lawyers, doctors or chiropractors to file false or exaggerated workers’ compensation claims to get money from insurers – 17%

Insurance fraud typically consists of the following types or instruments of fraud:

o Workers’ compensation premium fraud occurs when an employer provides false information in order to obtain a lower insurance rating.

o Workers’ compensation fraud occurs when an employee files an inflated or false injury claim in order to receive benefits or increase benefits.

o Staged accident fraud occurs when a person intentionally causes or is involved in an accident, or walks in and reports an accident in order to compensation or false or intentional damages and injuries. This could include automobiles or fake “slip and fall” claims.

o Property fraud is the falsification or inflation of a claim for the loss of personal or commercial property in order to obtain benefits. This includes losses due to the theft, disaster, or arson of insured property and vehicles.

o Benefits fraud occurs when an uninsured person receives benefits reserved for an insured person as it relates to his or her policy. A typical example of benefits fraud includes a non-covered dependent receiving medical or dental treatment by using a parent’s name or identity. Similarly, we have seen friends and roommates commit benefits fraud as well.