Insurance Fraud

Insurance fraud: Intentionally and willfully attempting to defraud or defrauding through the use of an invalid insurance claim. This criminal offense may be committed by filing an insurance claim for an injury which does not exist, exaggerating the severity of an injury or including false information on an insurance claim or policy in order to commit fraud. Additionally, arson, theft or destruction of property, when carried out with the intention to file a false insurance claim, may also constitute insurance fraud.

Insurance fraud may be a state or federal offense, and a defendant may face both criminal and civil charges. This can add up to harsh criminal penalties such as fines, restitution and imprisonment, as well as the mandatory payment of financial damages to the wronged party or parties.

We have highlighted several of the primary types of insurance fraud below.

Health Insurance Fraud
The most common perpetrators of fraud in the healthcare industry are medical providers. However, health insurance fraud, Medicare fraud or Medicaid fraud may be committed by a patient or a healthcare provider. It may include any attempt or act of fraudulently obtaining coverage or payment. Overbilling, billing for services not provided and performing unnecessary procedures may be examples of how healthcare providers may commit health insurance fraud. A patient may misrepresent information, falsify or omit information on an application or claim.

Life Insurance Fraud
Life insurance fraud may include any act committed in order to fraudulently obtain life insurance benefits. For example, a policyholder may fake their own death so a loved one may receive benefits, which are then shared with the policyholder. This type of insurance fraud may also be committed if a beneficiary, claimant or policyholder intentionally misrepresents or omits any type of pertinent information on an insurance application or claim.

Auto Insurance Fraud
There are a number of different types of auto insurance fraud. Faking a car accident, faking or exaggerating injury, or claiming an injury was caused in a collision that was actually a preexisting condition may all be examples of how auto insurance fraud may be attempted or carried out. Some people may intentionally cause auto accidents in order to seek high insurance claim payouts for exaggerated injuries or medical care that was unnecessary or not actually received. Auto insurance fraud may be committed in conjunction with health insurance fraud, in some cases.

Property Insurance Fraud
Often associated with arson or the intentional destruction of property, property insurance fraud is committed by a property owner in an attempt to obtain payment for a property insurance claim. According to statistics from the United States Fire Administration, approximately 31,000 fires were caused by arson, resulting in losses of $755 million, in 2006 alone. Arson is typically the preferred way of committing property insurance fraud, as it has a higher chance of covering up evidence of what caused the damage.

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