Insurance 4 Insurance

Fraud in insurance has undoubtedly existed since the industry’s beginnings in the seventeenth century, but it received little attention until the 1980s because law enforcement agencies had other priorities and were reluctant to provide the training needed to investigate and prosecute cases of insurance fraud. Fraudulent and dishonest claims are a major problem for the insurance industry and fraud is alleged in a number of the cases we see.

Auto Insurance Fraud, Health Insurance Fraud and Crop Insurance Fraud are few major types of fraud that are happing today’s.

Auto insurance fraud is an enormous problem. Unfortunately, many people do not realize the severity of this crime. There exists a mistaken perception that this type of fraud is somehow harmless and acceptable. A ground breaking study by the Insurance Research Council in 1996 found that one-third of all bodily injury claims for auto accidents contained some amount of fraud.

Common frauds include “padding,” or inflating actual claims; misrepresenting facts on an insurance application; submitting claims for injuries or damage that never occurred; and “staging” accidents.

Fraud can come in many different sizes and varieties. It can be as simple as misrepresenting facts on insurance applications and inflating insurance claims or as serious as staging accidents and submitting claim forms for injuries or damage that never occurred .Fraud may be committed at different points in the insurance transaction by different parties: applicants for insurance, policyholders, third-party claimants and professionals who provide services to claimants.

Prompted by the incidence of insurance fraud, about 40 states have set up fraud bureaus. These agencies are reporting a record number of new investigations are assigned to work general fraud cases, workers’ compensation fraud, medical and health-care fraud, and agent and company fraud. Areas of assignment may include:

1. Insolvency - Fraud committed by insurance companies that fail financially due to internal fraud by owners and corporate officers.

2. Unauthorized Entities - fraud, both criminal and civil, committed by insurance companies operating illegally in the state.

3. Health Care Fraud - focuses on organized medical and health care scams.

4. Workers’ Compensation - investigates employers for workers’ compensation premium fraud.

5. Public Employee Fraud - investigates state and local government employees for workers’ compensation claimant fraud.

A fraudulent act is committed if information in insurance applications is falsified in an attempt to obtain lower premium rates, or to inflate the amount of loss in a claim. Soft insurance fraud, also known as opportunistic fraud, occurs when normally honest people pad legitimate claims or intentionally understate the number of miles they drive each year or, in the case of business owners, list fewer employees or misrepresent the work they do to get a lower premium.

It is not normally the business of a firm to investigate how a policyholder has financed the purchase of a vehicle. But it is legitimate for the firm to make enquiries when there is doubt about the vehicle’s ownership. Where a firm suspects fraud, it should make its views known to the customer, who can then respond to the allegations.

Insurance crooks are picking your pockets. Insurance fraud is billions crime wave. It’s driving up everyone’s insurance prices. But concerned citizens, insurance companies and public officials are fighting back these frauds.

Fraud in insurance has undoubtedly existed since the industry’s beginnings in the seventeenth century, but it received little attention until the 1980s because law enforcement agencies had other priorities and were reluctant to provide the training needed to investigate and prosecute cases of insurance fraud. Fraudulent and dishonest claims are a major problem for the insurance industry and fraud is alleged in a number of the cases we see.

Auto Insurance Fraud, Health Insurance Fraud and Crop Insurance Fraud are few major types of fraud that are happing today’s.

Auto insurance fraud is an enormous problem. Unfortunately, many people do not realize the severity of this crime. There exists a mistaken perception that this type of fraud is somehow harmless and acceptable. A ground breaking study by the Insurance Research Council in 1996 found that one-third of all bodily injury claims for auto accidents contained some amount of fraud.

Common frauds include “padding,” or inflating actual claims; misrepresenting facts on an insurance application; submitting claims for injuries or damage that never occurred; and “staging” accidents.

Fraud can come in many different sizes and varieties. It can be as simple as misrepresenting facts on insurance applications and inflating insurance claims or as serious as staging accidents and submitting claim forms for injuries or damage that never occurred .Fraud may be committed at different points in the insurance transaction by different parties: applicants for insurance, policyholders, third-party claimants and professionals who provide services to claimants.

Prompted by the incidence of insurance fraud, about 40 states have set up fraud bureaus. These agencies are reporting a record number of new investigations are assigned to work general fraud cases, workers’ compensation fraud, medical and health-care fraud, and agent and company fraud. Areas of assignment may include:

1. Insolvency - Fraud committed by insurance companies that fail financially due to internal fraud by owners and corporate officers.

2. Unauthorized Entities - fraud, both criminal and civil, committed by insurance companies operating illegally in the state.

3. Health Care Fraud - focuses on organized medical and health care scams.

4. Workers’ Compensation - investigates employers for workers’ compensation premium fraud.

5. Public Employee Fraud - investigates state and local government employees for workers’ compensation claimant fraud.

A fraudulent act is committed if information in insurance applications is falsified in an attempt to obtain lower premium rates, or to inflate the amount of loss in a claim. Soft insurance fraud, also known as opportunistic fraud, occurs when normally honest people pad legitimate claims or intentionally understate the number of miles they drive each year or, in the case of business owners, list fewer employees or misrepresent the work they do to get a lower premium.

It is not normally the business of a firm to investigate how a policyholder has financed the purchase of a vehicle. But it is legitimate for the firm to make enquiries when there is doubt about the vehicle’s ownership. Where a firm suspects fraud, it should make its views known to the customer, who can then respond to the allegations.

Insurance crooks are picking your pockets. Insurance fraud is billions crime wave. It’s driving up everyone’s insurance prices. But concerned citizens, insurance companies and public officials are fighting back these frauds.