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What I Should Know About Insurance Fraud

Insurance Fraud


In the past, I wrote specifically about life insurance fraud, so I thought now I should write about the insurance fraud also, and what people need to know about insurance fraud. If you missed that post, then you can Click here to read about Life Insurance Fraud and how to report it. Let's talk about Insurance Fraud in general.
© Akhil Sharma  | AnythingRelated.com | All Rights Reserved

What is Insurance Fraud and Why Should You Worry?

Any kind action or activity which incorporates swindling methods as well as fraudulent means to get insurance payouts is identified as Insurance Fraud. We all know what the term "Fraud" stands for; scam, cheating, and swindling an individual or a group of people for personal benefits. Insurance Frauds usually incorporate fraudulent insurance claims. As per the insurance industry, insurance fraud is common and a lot of these claims are never recognized, resulting in huge losses for the insurance industry. But, who is impacted by these frauds? Insurance companies? NO! We, the people! Yes, consumers of all types or kinds of insurance are forced to pay higher premiums to cover up the loss caused by insurance fraud. Your increased premium is directly proportional to an insurance fraud. Obviously, there are many other reasons of higher insurance premiums, but this one is the primary reason.
© Akhil Sharma  | AnythingRelated.com | All Rights Reserved

Soft and Hard Insurance Fraud

Property insurance, health insurance, life, car, and all other types of insurances could be susceptible to fraud. There are mainly two kinds of frauds; soft and hard frauds. In soft insurance fraud, a genuinely active claim is usually overstated or exaggerated. For instance, claiming additional damage in a car accident and forcing insurance agency to replace extra damage parts which were already damaged before the accident; I selfish thinking and cheating leads to the execution of such actions. In hard insurance fraud, fake situations are often developed to get an insurance payout. For instance, claiming medical services which were never given. Burning down a house with an intent of getting an insurance payout is likewise a hard insurance fraud.

How Insurance Companies Identify Insurance Fraud

Insurance agencies use different methods to identify insurance fraud. When a person submits a claim, the company uses different techniques to know whether the case is genuine or not. Their computer verifies signs and other aspects of the claim to check any suspicious or fraudulent activities involved in the case. If everything looks good on the computer, then the case is forwarded to another insurance expert who can further review the claim or refer it to a claim adjuster. The insurance company will deny the claim if any fraudulent activity is noticed during the investigation. However, if the case is valid, then the payout will be generated according to the pre-specified terms of the insurance policy. I have not mentioned many other algorithms a typical insurance company uses to identify insurance fraud, because that could help swindlers who are looking for ways to commit insurance fraud.
© Akhil Sharma  | AnythingRelated.com | All Rights Reserved

The Struggle of Insurers

Insurance providers, around the globe, struggle a lot due to scams, and they are affected by fraud since they commenced in business. Many countries and nations are also trying to fight with such scams; they are implementing penalties and fines to stop insurance fraud. Many nations already have strict laws; a lot of countries support insurance agency investigations with police investigations to expose, prevent, as well as to completely put a stop to insurance fraud.

Bottom Line

Insurers, sometimes, flag a genuine case also. Sometimes, people get unfairly denied. What I am saying is these things also happens due to the strict claim verification procedure. However, a consumer is allowed to open disputes, if he or she feels that her or she have been declined unreasonably. Government officials and attorney generals can help you if you decide to dispute a denied claim.

Comments

  1. This is great information. I work for a car insurance company and I run across fraudulent claims all the time.

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  2. I do sympathize with insurance companies and hope they can minimize the fraudulent claims so that the legitimate claims can be expedited without problems!

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  3. Great information! Sometimes we don't realize how insurance fraud can effect our premiums.

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  4. It must be hard for insurance companies to weed out the fraudulent claims. It's sad that people even try to get away with things like this.

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  5. Thank you for sharing. I hope that insurance companies can reduce the number of fraudulent claims.

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  6. You really have to be careful, there will be fraud on either side sometimes. Insurance companies are also just being cautious especially when people started to come up with fake situations just to get money. This is a very informative post!

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  7. Helpful information! I have to admit, this is not something I think about on a regular or semi-regular basis so it's good to be reminded that this is a real thing. An important issue to know about.

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  8. This is really interesting since I knew someone 3 dozen years ago that fits this fraud category and I couldn't believe she did it.

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  9. I think a lot of people forget that when they commit fraud, they aren't hurting the insurance company, they are hurting everyone else. It's so disappointing that people try to rig the system, which makes it hard for insurance companies and even harder for everyone else.

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  10. This is really a helpful information. Glad you share this

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  11. This is very interesting. My ex partner works t an Insurance company but I never heard that they are fraud or something like that.

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  12. Oh, this is sad. Thanks for the information, I am not aware of this and I do believe that this must be resolve asap.

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  13. My dad used to work for Insurance before. I never heard of Insurance fraud from his work but heard some horror stories about some companies.

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  14. Anything that makes your payments skyrocket needs to be checked. I'm sure its not humorous to have spend a good part of your work time trying to decipher truth from fiction.

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  15. Such a great information as I am not much aware about the facts behind such insurance frauds. I hope that Insurance companies have a counter plan to reduce the number of fraudulent claims gradually!

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  16. Interesting post! I find this info helpful. Thanks for sharing

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  17. This is so scary! What an important topic. Thanks for shedding light on this, I really need to share this around! Great post!

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  18. I've heard a lot about insurance fraud and it's really scary if it happens to you.

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