The Crime of Insurance Fraud
Insurance fraud occurs when a person or persons make money or attempt to make money from insurance transactions through deception, lying, cheating or stealing for profit. Schemes that insurance fraudsters create range from lying about damage or loss of property to deliberately crashing a car. Insurance fraud schemes can cause accidental injury to the perpetrator or innocent bystanders, and insurance premiums increase as a result of insurance fraud. In the United States, insurance fraud is estimated to cost consumers more than $80 billion each year.
There are 3 types
Property fraud is committed by overstating the amount of damage to one’s home, car or other property. This includes deliberately damaging possessions to gain insurance reimbursement or submitting false claims about loss or theft of property. Both home or renters’ insurance fraud and vehicle-related insurance fraud fall into this category.
Casualty fraud occurs when someone fakes or exaggerates an accident or injury to gain money from insurance providers. This sometimes accompanies property fraud during staged accidents and other types of vehicle-related insurance fraud.
Workers’ Compensation Fraud
Workers’ compensation fraud is committed when a person or persons make claims about a work-related injury that either didn’t happen at all or occurred away from the workplace. Employers can commit workers’ compensation insurance fraud by under-reporting employee levels or misstating the type of duties performed by workers.
How does insurance fraud affect you?
Fraudulent insurance claims in Virginia exceed $20 million each year and millions more in fraudulent claims are attempted. Insurance fraud is estimated to add as much as $1,000 to the cost of goods and services. For more statistics, view our annual reports.
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.
Are you ready to help Stamp Out Fraud?
Test your knowledge by taking the Stamp Out Fraud quiz! See if you can spot the signs of insurance fraud, and if you know how to protect yourself and others from becoming victims.