Types of insurance fraud

Insurance fraud is when deception is involved in the insurance process. It could be a case where someone makes a false claim from an insurance company. It could also be when the insurer refuses to pay the claimant. Statistics have shown that the number of insurance frauds committed globally is increasing.

The motive behind insurance fraud is greed. People are always seeking financial gain through insurance fraud. There are cases where people overinsure their property. Then they intentionally destroy it to claim the insurance.

Types of insurance fraud:

Life insurance:

People take out policies to insure their lives. When there is a reasonable amount owed, they fake the death and your beneficiaries claim the amount. They may appear after a few years and claim to have memory loss.

Health insurance:

This is when the claimant provides false information to the insurance company in order to take benefits from them. Policyholders commit this type of fraud in several ways. Some common shapes are:

• Allow someone else to use your policy information.

• There are cases in which people claim the amount incurred to pay for prescriptions that are not prescribed by their doctor.

Medical providers also commit this type of fraud. They can bill for services they haven’t provided, supplies they may not have used, or even alter existing claims.

This type of fraud is also committed by health insurance companies. They may remove claims from their records, may not pay claimants, or even deny coverage to genuine parties.

Auto Insurance:

To claim insurance, people fake accidents and collisions. It is also claimed when people report car thefts. It could also be claimed for damage that existed before the policy was taken out. Sometimes people claim coverage for an accident that may have occurred before they took out the policy.

property insurance:

In this case, people damage their property to make a claim. Sometimes they destroy assets that are not very valuable and claim a larger amount. People even fake theft to make a claim. Sometimes people claim second insurance after having been covered for their losses by an insurance company.

Insurance fraud affects society as a whole. Fraudulent claims cause insurance companies to incur large losses. To offset these losses, these companies raise the premiums of honest policyholders. Therefore, honest citizens pay a price through no fault of their own.

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