Get Smart About Insurance Fraud
What many Americans don't know is that insurance fraud increases insurance rates for consumers nationwide. According to the National Insurance Crime Bureau (NICB), insurance fraud costs each American household $200 to $300 per year—a loss totaling at least $30 billion a year.
About Insurance Fraud
Insurance fraud is defined as an intentional misrepresentation of facts and circumstances to an insurance company to illegally obtain funds. Insurance fraud is a very common white-collar crime, right up there with tax evasion.
Insurance fraud can be committed at different points in the insurance transaction, by applicants, policyholders, third-party claimants or professionals such as physicians or chiropractors who provide services to the claimants. Insurance fraud may also be committed by insurance agents by misrepresenting themselves to a client, resulting in the consumer paying for coverage he or she may not actually have.
Insurance Fraud: Hard vs. Soft
"Hard" insurance fraud occurs when there is a deliberate attempt to stage or invent an accident, injury, theft or other incident that would be covered by insurance.
In the world of auto insurance fraud, "crash test dummies" are known as drivers and passengers used in staged auto accidents. “Crash test dummies" will typically approach people and convince them to participate in the scam, saying that legal, medical and all other paperwork will be taken care of. Generally... ...
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