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What Is Insurance Fraud and How Does It Occur? In layman’s terms, it’s the filing of false insurance claims. These deceptions might be planned or systemic. For example, a homeowner can make a bogus burglary claim, and a doctor can bill an insurer for treatments that were never provided.
A driver can manufacture an accident and then have the claim handled by an unscrupulous lawyer or doctor. Workers compensation fraud is another widespread sort of insurance fraud. You may have been a victim of insurance fraud, whether you were an employee or a customer.
Insurance fraud is primarily motivated by monetary gain. Insurance contracts provide a window of opportunity for profit. For example, a former prison guard called John Darwin was discovered alive after being assumed dead following a boat accident. He stated he had no recollection of the time following his disappearance.
John Stonehouse, a former British government official, went lost from a Miami beach in 1974. He was convicted of fraudulent claim after a search found he was residing in Australia under an identity. He was eventually released from prison and given a seven-year term.
While the majority of insurance consumers have no intention of defrauding their insurers, some do. Even if they aren’t aware of it, some customers may deceive their insurance company in order to collect payments they don’t deserve.
Some people lie when applying for insurance, while others misrepresent the amount of money lost on a claim to get more money. However, if you’re unsure whether a claim is valid, you should file a complaint and request that the firm investigate it.
There are several ways to report insurance fraud, but the first step is to file a complaint. You’ll get a reward for reporting the crime once you’ve submitted a complaint. You can also take certain precautions to safeguard yourself and your loved ones.
If you’re worried about insurance fraud, contact the attorney general’s office in your state. You can also report it to the National Insurance Crime Bureau (NICB), a non-profit that collaborates with insurance companies and police enforcement. The NICB website is a good place to start.
While there are other types of insurance fraud, the most prevalent is inflating premiums by claiming a larger value for the policy than it is actually worth.
You should never lie on an application, whether you’re applying for a job or a health insurance plan. Telling the truth is the only way to avoid insurance fraud. It’s not as difficult as you might imagine! To locate the best offer, check quotes from several businesses and compare perks and costs.
Insurance fraud, fortunately, is not a victimless crime, and the financial costs of insurance fraud are substantial. Every year, it costs society billions of dollars. You can take a few steps to safeguard yourself and your loved ones from becoming victims of this criminal conduct.
You can, for example, browse around for the best deal and compare features and costs. Make sure you receive a few quotations while searching for insurance.
You can always call your insurer and submit a complaint if you’re not sure what insurance fraud is. It’s also crucial to understand the consequences of being a victim of insurance fraud. Because the consequences of such crimes can be serious, it’s best to learn about them and prevent them. It is too late to file a complaint if you have already been a victim of fraud.
The first important thing to know about insurance fraud is that it is not the same as a financial disagreement with the insurance company. Make a complaint if you’re concerned about insurance fraud.
You should always make a complaint, no matter how modest the money is. Being aware of the dangers linked with this illicit activity is a smart idea. Contact your insurance company right away if you have any suspicions.
In Conclusion
Nobody seems to be immune to the allure of profitable insurance transactions, from ordinary people to celebrities, politicians to corporations. Insurance fraud is linked to a number of myths, and given the financial (not to mention legal) ramifications, an overview is more than welcome.
After all, the more you know about it, the less likely you are to be taken advantage of, either by others or by the lure of “simple, harmless” profit.
Watch the video below to get more insight on insurance fraud….
video credit to Barbara Griswold, LMFT and Maggie Gleason best voice we have on insurance related issues.
