Feb 2 2019

10 Most Common Types of Insurance Fraud, Business Insurance Quotes: Compare Providers for Free, types of automobile insurance.

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10 Most Common Types of Insurance Fraud

by Staff Writer

Insurance fraud is not a victimless crime. When people cheat insurance companies out of money, the honest people that pay premiums pay through increased insurance costs. Insurance companies lose an estimated $30 billion per year in insurance fraud costs that have to get passed on to bill-paying consumers.

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You can help stop insurance fraud by contacting your state department of insurance and giving as many details as you possibly can about the fraud that you witnessed. Consumers should learn to be vigilant in identifying insurance fraud by becoming familiar with the 10 most common forms of fraud.

Stolen Car

There are two ways that criminals perpetrate the stolen car insurance fraud scam. The first type of stolen car fraud is when a car owner sells his car to a body shop to be cut up for parts and then reports the car as stolen. The body shop is in on the fraud, so the authorities are never told about the sale for parts.

The second most common way that criminals commit stolen car fraud is to sell the car to an overseas buyer, make the transaction without any paperwork, ship the car overseas and then report it stolen.

  • Car Accident

    The next time you see a car accident, you could be watching insurance fraud in action. In most cases, the driver and accident victim are the only ones in on the scheme. In other cases, the driver, victim, insurance investigators and even some of the bystanders that give statements are in on the fraud. The value of the vehicles is greatly inflated and the insurance payoff is for two totaled vehicles.

  • Car Damage

    Any form of insurance fraud is illegal and damaging to the insurance company. Some people will report a small car accident, get an estimate for damages, collect the insurance check and then not get the car fixed. This is single most common form of auto insurance fraud going on, and it happens constantly. The people doing it see no harm in it, but the money the insurance company pays out comes from premiums paid by other customers, which will go up the more often this fraud is committed.

  • Health Insurance Billing Fraud

    Unfortunately, health care professionals will sometimes get in on the insurance fraud act. One form of lt;a href= gt;health insurance fraud lt;/a gt; is for health care providers to bill health insurance companies a high fee for a standard procedure, or to bill for services that were never rendered.

    For example, you may go in for a regular check-up but your doctor decides to bill your insurance company for an in-office surgical procedure that never happened. The patient is the victim of fraud and does not even know it.

  • Unnecessary Medical Procedures

    If it seems like your doctor is ordering you to go for unnecessary testing, then you may be the victim of insurance fraud. If you go to the doctor for a sore arm but your doctor orders a series of blood tests that have nothing to do with your arm, then that could be a common form of insurance fraud.

  • Staged Home Fires

    Homeowners insurance fraud costs insurance companies and their customers billions of dollars each year. One of the most common form of homeowners insurance fraud is the staged fire or act of vandalism. This can be done in one of two ways. The homeowner either removes important family items before the fraud takes place, or the homeowner makes sure that the insurance company knows the value of the expensive items and then has them destroyed.

    In almost every case of a staged home fire, the homeowner is not home and can account for his whereabouts when the event took place. Criminals are hired to set fire to the home, or break in and vandalize the home to make it look like the homeowner was victimized.

  • Storm Fraud

    Criminals will take advantage of any situation to commit insurance fraud, including a major storm. A common form of fraud that happens in the wake of major storms is homeowners will either enhance the storm damage to their home to get more of a settlement, or the homeowner will take advantage of how busy the insurance company is and call in a claim even if there was no storm damage.

  • Abandoned House Fire

    One of the most common forms of homeowners insurance fraud is the abandoned house fire. It can happen for a variety of reasons, but the end result is always fraud. The homeowner could have been transferred to a different city because of his job and cannot sell his property, or a landlord owns a home in a neighborhood that is no longer popular and cannot get tenants to help pay the mortgage.

    If you have ever been at the scene of an abandoned house fire after the flames have been put out, you will see at least one fire inspector for the insurance company on site. This is an extremely common kind of insurance fraud that not only causes premiums to go up, but it also puts the buildings next to the abandoned home in jeopardy as well.

  • Faked Death

    This form of insurance fraud is so common that it has been the plot of many movies, television shows and books. A criminal will take out a life insurance policy on himself and make his spouse the beneficiary. After the policy has been in effect for several months, the insured criminal fakes his death and his spouse is paid the death benefit. When the funeral is over, the spouse suddenly disappears and the insurance company is out the death benefit.

  • Renter s Insurance

    People who rent homes or apartments will often take out inexpensive renter s insurance policies to cover the cost of their possessions. Prior to moving out of the home or apartment or when financial times get bad, the insured will sell their possessions and then report them stolen to collect the insurance money.

  • Insurance fraud affects everyone in some form or another. When your auto insurance premiums go up, that is partly due to insurance fraud. If you know of insurance fraud that has been comm

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    Written by HOTEL