When insurance fraud makes the news, it’s usually when high-stakes claims or another crime (such as arson, or murder) are involved. In truth, insurance fraud is a big deal, no matter the amount of the fraudulent claim, and it affects everyone. Every year, fraudulent claims make up about 10% of the insurance industry’s expenses. In recent years, some states have adopted tougher policies on fraud, making it a high-risk operation for those trying to cheat the system. Here’s how it works:
Soft Fraud vs. Hard Fraud
Anytime someone tries to deceive an insurer to get money or benefits they aren’t entitled too, it’s considered fraud. “Hard fraud” occurs when a person intentionally submits a false claim to their insurer, or when they fake an accident, theft, injury, or even death to collect an illegal insurance payout. “Soft fraud” involves exaggerating a valid claim to get increased compensation, like inflating medical or repair bills to cover the cost of the deductible. Although it may seem insignificant and harmless, these small claims add up in a big way, and they are prosecutable offenses in many states.
Why It Matters for You
The increased burden insurance fraud places on the system hurts everyone, and individual acts of hard fraud pose a public health threat. That translates to:
- higher insurance premiums (so insurers can afford to pay off claims)
- higher cost of goods and services (as corporations pay higher premiums too)
- business failure and job loss (small businesses are particularly vulnerable)
- personal injury, or even death (staged accidents put innocent bystanders at risk)
What Can You Do?
Be aware! The best way to protect yourself against insurance fraud is to closely review bills and other correspondence from your insurer. Review your policy and any revisions your insurance company sends you; if you have questions, speak to an agent or contact your state insurance department. If an offer seems too good to be true, it’s probably a scam.
Holliday Investigative Services specializes in preventing insurance fraud, Georgia. If you suspect a claimant of committing fraud, let our investigators apply their surveillance skills to the situation. We get the facts, fast!