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How to Determine if You Have Been a Victim of Insurance Fraud

Insurance fraud has one of the highest crime rates in America and costs companies and consumers tens of billions of dollars each year. Understanding what insurance fraud is can help protect you from becoming a victim.

What is Insurance Fraud?

To put it simply, insurance fraud is when an individual lies to or deceives an insurer so they can collect money to which they are not entitled. Consumers can defraud insurances companies and insurance companies can defraud consumers. Insurance fraud is classified as either “soft” or “hard” depending on the nature of the case.

Soft fraud includes “little white lies” someone might tell their insurance company. This could be something along the lines of a car owner trying to cover their deductible by inflating their fender bender claim. Although this may not sound serious, soft fraud is a crime and ultimately raises everyone’s insurance costs.

Hard fraud is when someone purposefully fakes an accident, injury, arson, theft, or a different type of loss in order to collect money illegally from insurance companies.

What are the Types of Insurance Fraud?

There are multiple types of insurance fraud that could cost you or a loved one time and money, especially if you don’t realize that you are a victim. While these are just a few of the types of insurance fraud out there, here are some things you can do to protect yourself:

Fake insurance companies: Consumers should be wary of fake insurance companies. These companies will often collect premiums for fake policies while having no intentions of paying claims. These fake companies may offer low-cost policies in order to lure in consumers.

Fake death: Sometimes an individual will take out a life insurance policy and make their partner or spouse the beneficiary and then before you know it, that individual is “dead.” Faking one’s death to claim a life insurance policy happens more than you’d think, but is common among life insurance policies.

Unnecessary medical tests: Watch out if your doctor seems to be ordering unnecessary medical tests that have no relation to your condition or diagnosis. Also, look at your bills to be sure that you actually received the tests or procedures your doctor billed your insurance company for.

What to Do if You Think You Have Been a Victim

Unfortunately we live in a world where people aren’t always honest, but you can protect yourself from insurance fraud by doing a little research. If you or someone you know suspects they may be a victim of insurance fraud, contact PLM Attorneys today. Our knowledgeable team has the experience necessary to defend your rights.

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