Insurance fraud costs billions of dollars annually. Learn to recognise and help prevent insurance fraud.
Overview of insurance fraud
There are different types of insurance fraud, such as filing false claims of personal injury, disability, medical insurance claims, and even life insurance. It is not just the citizen filing false claims for financial gain, but also insurance agents themselves also commit insurance fraud. The FBI gives the example of the insurance agent who accepts insurance premium payments and then misappropriates the money for his own personal use. Understand Insurance gives examples of reasoning behind insurance fraud, saying it can be:
- Opportunistic in that legitimate claims are padded or exaggerated
- Premeditated as in the case of arson or staged “accidents”
- Fraudulent non-disclosure, which occurs through misrepresentation of facts that are material to the insurance policy
Cost of insurance fraud
Insurance fraud costs an estimated $2 billion annually in Australia alone, according to Insurance Fraud Bureau Australia (IFBA). It costs $40 billion in the U.S., says the FBI.
5 ways you can help spot and reduce insurance fraud
There are simple ways to spot insurance fraud and to help reduce and prevent it.
- If an insurance agent refuses to show documentation that he or she is licensed to sell insurance, and does not give satisfactory information regarding the company underwriting the policy, Consumer Action says any paperwork or policies you receive “are probably not worth the paper they are printed on.”
- If you get bills for any medical services or procedures that you did not undergo or if your itemized statement includes charges that were paid by medical insurance and you did not receive those services, it could be a case of your medical bill being “padded.”
- If you know of a co-worker or neighbor who filed a false claim of being injured on the job or claims to be disabled but is actually going about normal activities, report the person. Your report will be kept confidential.
- If you are not provided a copy of your insurance policy or are told you cannot have time to look the policy over, this is a sign that you should be wary of. Ask if you will be given a copy of the policy immediately after signing it and how long you have to look over the policy.
- If you are an employer or agency and believe a false insurance claim has been filed, Suncoast PI gathers evidence and does so in a discreet manner. Suncoast PI reports accurate facts that will stand up in court. Suncoast PI fraud investigation services includes personal injury/work cover, public liability, life insurance and disability, medical negligence and income protection, and other services. Uncovering insurance fraud can potentially save you, your organization or agency a great deal of money. Remember that insurance fraud is costing billions of dollars to honest citizens.