Insurance fraud is an illegal act which costs families an average of $700 annually in higher premiums. When individuals commit fraud against either an insurer or themselves, extra premiums must be paid by those involved.
Be wary of companies that require cash, wire transfers or prepaid cards as premium payments; instead use check or credit cards so if there’s any fraudulent activity involved your money can be returned quickly and effectively.
Reporting a Scam
Insurance fraud is an enormous issue that affects consumers across the board and costs them millions in higher premiums. It occurs in various forms and occurs across all walks of life – from homeowners falsely reporting burglary and stolen items as their own to drivers staging fake accidents with unscrupulous doctors or lawyers helping create false narratives to support claims for compensation.
Insurance scams also occur within the industry, with fraudulent agents pocketing premium payments instead of forwarding them on to their respective insurance company. Consumers can protect themselves from this by purchasing policies only through licensed agents or directly from insurance companies themselves; and always paying by check or credit card that can be traced and verified, rather than cash payments. They should never give personal information out voluntarily via phone call, email or text, only providing money through licensed agents that they trust as legitimate.
Thieves frequently exploit life insurance policy beneficiaries to attempt to fraudulently claim death benefit payments from them. To prevent this scam, be sure that any potential beneficiaries are listed on your actual life policy, and that it remains active. Likewise, consumers should avoid agents offering accidental death benefit add-ons as these often don’t warrant their cost.
Other scams involve workers’ compensation fraud, in which an employee fabricates injuries to receive a higher payout from an insurance company. This scam can be avoided by making sure workers are actually injured at work and not simply filing false claims; additionally they should never accept gifts or money at the scene of an accident and sign any documents without first consulting with their lawyer first.
The National Insurance Crime Bureau (NICB)
Fraudsters steal billions from hardworking Americans annually through insurance fraud, with an estimate stating that each household pays an additional $1,000 each year due to fraud costs.
Fraud can take place during any phase of an insurance transaction – from application to filing a claim. Common examples of insurance fraud include applicants falsifying their application or agents pocketing premiums without permission; staging an accident or theft for financial gain; an insured exaggerating their claim amount or an insurer engaging in dishonest practices like billing for unnecessary services by an insurer.
The National Insurance Crime Bureau is a not-for-profit organization dedicated to combatting insurance fraud and working closely with law enforcement agencies to detect, prevent and investigate crime. Based out of Illinois and primarily focused on motor vehicle theft crimes, this non-profit also tackles healthcare and workers’ compensation fraud as well as many others forms of insurance fraud. Membership consists of both insurers and self-insured parties alike.
NICB coordinates efforts between insurers and law enforcement agencies to combat insurance fraud and related crimes through data analytics, investigations, learning programs, legislative advocacy advocacy and public awareness activities. With decades of experience battling insurance fraud successfully.
Some of the most prevalent insurance scams involve auto claims. Motorists are being targeted by fraudsters who falsely report hail damage to their insurer, then use an inflated repair bill as leverage against them for a larger settlement from them. Such scams have led to state regulators filing numerous lawsuits and consumers filing suits over them. Another popular form of fraud involves fraudulent towing abuse.
The National Association of Insurance Commissioners (NAIC)
The National Association of Insurance Commissioners (NAIC) is an organization representing all state insurance regulators. It offers them data, information and training; as well as creating model laws and regulations which states can adapt for their own regulatory requirements.
NAIC members work tirelessly to protect insurance consumers by identifying and prosecuting fraudulent activities, providing education on various forms of fraud as well as reporting methods. Furthermore, they partner with law enforcement and other insurance companies to fight crime – with numerous resources for individuals on its website.
Insurance fraud is a serious criminal offense with grave financial and personal repercussions, from small instances such as consumers telling small fibs about themselves to major cases committed by organized criminal rings. Insurance fraud comes in various forms and should never be committed on purpose by individuals alone – the implications can be dire and even life threatening.
The National Association of Insurance Commissioners, or NAIC, is an organization which oversees all sales and processing of insurance in the United States. Its membership consists of insurance commissioners from each of the 50 states plus DC as well as five U.S. territories such as American Samoa, Guam, Northern Mariana Islands Puerto Rico and Virgin Islands as well as various committees task forces and working groups.
South Carolina recently hosted the NAIC’s 2021 national meeting, held virtually so people could join remotely. Two key issues of interest to attendees during this virtual gathering were COVID-19 lessons learned and race and insurance, climate risk resiliency and accelerated underwriting – and even three special sessions focused on these issues!
The Coalition Against Insurance Fraud (CAIF)
The Coalition Against Insurance Fraud brings together private and public groups to fight insurance fraud. Through outreach, advocacy, research, education and outreach events, the goal is to educate the public and enact stronger fraud laws through outreach, advocacy, research and education activities. Insurance fraud costs consumers billions every year in false claims, staged accidents or any number of activities designed to take advantage of those with legitimate policies that purchase them.
Insurance fraud takes many forms; among the more prevalent are health care fraud (for instance stealing Medicare or Medicaid numbers), workers’ compensation fraud, disability insurance fraud and auto insurance fraud. Life insurance fraud is also prevalent; consumers can commit it by staging fires, accidents or thefts deliberately to defraud an insurer; providing false statements when reporting claims or by exaggerating claims to obtain more money for claims than are due.
Insurance fraud offenders face additional repercussions than simply criminal penalties; fines and imprisonment could also be applicable. Furthermore, they will need to reimburse their insurer for all amounts paid out as fraudulent claims plus investigation expenses; furthermore they may incur the stigma of being felons.
Individuals can report insurance fraud by contacting their local FBI office, state insurance department, NICB or directly the insurer where they believe they have been scammed – most firms offer incentives and rewards for reporting such cases of insurance fraud! They can also provide details on who may be perpetrating this act and help in tracking them down.
The FBI
if you suspect an insurance fraud scheme that exceeds state or local jurisdiction, file a federal complaint with the FBI. Insurance fraud affects us all and costs consumers billions annually in higher premiums. To report it with them, simply visit their website and select an option for type of fraud that concerns you; once reported you may need to provide contact info so the task force can follow up on it; additionally it’s wise to collect any documents related to what you saw as well.
The FBI is the primary investigative body charged with uncovering health care fraud schemes and financial crimes, as well as insurance fraud cases – including workers’ comp fraud and property/casualty insurance fraud. Their Fraud Section comprises over 80 experienced white-collar prosecutors whose goal is to safeguard public finances by prosecuting health care fraud committed by medical professionals or patients, or anyone involved with administrating private or government-funded insurance programs.
The FBI website contains links to various organizations and agencies that can assist you with reporting fraud. It is important to remember that you should always first report it to the appropriate agency based on its nature – for instance mail fraud should generally be reported directly to USPS Inspection Service before being brought before FBI.
