Did you know that insurance fraud is a crime? The first offense is subject to a fine of up to $5,000 plus the stated value of the claim. One of many additional charges that may be brought as a result of insurance fraud is larceny or grand larceny. In addition to restitution of the amount claimed, the insured may have to pay for the expenses incurred during the investigation as well as serve any jail time the law requires.
Here are several types of fraud:
- Inflated automobile and property repairs to cover an insured’s deductible
- Staged auto accidents
- Staged auto thefts
- Arson (responsible for up to 900 deaths and $2 billion in damages last year)
- Slip and fall schemes
- False residential and commercial burglaries
- Phony medical reports (Legitimate patients seeking medical care can get caught up in the “medical mills” that are committing Insurance Fraud. Unsuspecting patients are billed for exaggerated or unnecessary services. The patient may also receive poor treatment from unethical medical providers.)
Public awareness of insurance fraud has increased in the last few years. A recent poll shows that:
- 88% of Americans understand this is a major problem.
- 78% would report an instance of Insurance Fraud even if a friend or relative were involved.