Types of Insurance Fraud

LEARN ABOUT THREE TYPES OF FRAUD

Insurance fraud is complex and can occur in many different ways. The best way to protect yourself is to learn how to recognize the various types of fraud.

What is it?

A type of property fraud, home and renter’s insurance fraud occurs when a policyholder either exaggerates or falsifies an insurance claim for losses suffered to their home or property. Insurers, builders and contractors can also commit this type of fraud by filing false claims, misinforming policyholders or charging/overcharging for work that wasn’t done.

What does it look like?

Some common home and renter’s insurance fraud schemes:

  • Fake burglary or theft claims
  • Falsely reporting pre-existing damage as vandalism
  • Arson for profit
  • Contractors who ask for a blank check or payment in cash

How can you help prevent it?

  • Claim only the damages that occurred as a result of the incident being reported
  • Provide the exact value of lost or damaged items
  • Get more than one written estimate for repairs
  • Before hiring a contractor to make repairs, contact your insurance provider to make sure that the work is covered by your policy
  • Always use a licensed contractor
  • Never pay a contractor in full before work is completed

What is it?

Casualty fraud involves attempting to get money from an insurance company by faking or exaggerating an injury or accident. One example is faking an injury after slipping on the floor in a store or other place of business.

Vehicle insurance fraud—which can be property and/or casualty fraud—is the is the most common type of insurance fraud in Virginia. Attempting to make money through false claims of car accidents or accident-related injuries is insurance fraud. It may involve a person damaging their own vehicle, scammers staging a crash or mechanics overcharging for or lying about repairs.

What does it look like?

Some common vehicle-related insurance fraud schemes:

  • Staged crashes or caused accidents, such as intentional sideswiping or cars that cut in front of other vehicles and force collisions
  • Deliberately damaging or burning a car to get out of a lease or payment
  • Repair shops that bill for work that hasn’t been done or that uses cheap, inferior replacement parts

How can you help prevent it?

  • Don’t tailgate because following too closely could set you up for a staged accident
  • In the event of an accident, take pictures of damages and road conditions, and make note of license plate numbers and who was involved
  • Have vehicle repair work done by a reputable shop; ask the shop manager to point out all of the replacement parts and show you the parts that were replaced
  • Get a written, itemized estimate for repairs and check the bill carefully
  • If injured in an auto accident, be wary of any person who approaches you and offers to provide you with the name of a doctor or lawyer

What is it?

Workers’ compensation fraud happens when an employee claims an injury that either didn’t happen at all or occurred away from the workplace. Employers can also commit insurance fraud by under-reporting employee levels or misstating the type of duties performed.

What does it look like?

Some common workers’ compensation insurance fraud schemes:

  • Claiming an injury well after an incident occurred
  • Receiving unnecessary medical treatment
  • Faking injuries, such as the infamous “slip and fall”
  • Claiming that an injury that occurred at home happened at work
  • Collecting workers’ compensation benefits long after an injury has healed

How can you help prevent it?

  • Be mindful of injuries that occur at the workplace
  • Understand the coverage provided by your employer and learn what is covered by your workers’ compensation
  • Don’t collect workers’ compensation after an injury has healed
  • Report any injury to an employer as soon as you are able to
  • Ask your employer to install video equipment so that there is clear evidence in the event of an accident

WHAT SHOULD YOU DO IF YOU SUSPECT INSURANCE FRAUD?

If you have suspicions about an act of insurance fraud, you can submit a confidential tip. Your information could help prevent insurance fraud, and tips leading to arrests are eligible for rewards of up to $25,000.