What types of insurance fraud are there?

Types of insurance fraud

As mentioned, there are different types of insurance fraud. You can commit insurance fraud prior to purchasing insurance. For example, giving incorrect information to the insurer when applying for insurance is fraud. Thus, you can also commit insurance fraud after the insurance is purchased. Some examples are mentioned here:

Lying or concealing when applying for insurance
Fraud is common when applying for insurance. To increase the chances of acceptance, a person may enter incorrect information. These underwriting questions are always asked by the insurer before an application. Acceptance questions include:

• Have you ever had a driving disqualification?
• Has any of your insurance policies ever been cancelled or declined by another insurer in the past?
• In the past eight years, have you come into contact with the police or justice system as a suspect?

If any of these underwriting questions are true for your situation, you must always answer "Yes. If you do not do so truthfully and lie, it is insurance fraud.

Intentionally causing damage

It is also common for someone to intentionally cause damage in order to get paid out, for example by staging a collision or burglary or by deliberately driving into something. It is then up to the insurer to establish that fraud has occurred. They often do this by launching an investigation, with an expert to look into the matter. People often forget a few things when committing fraud, such as smashing a window. This is done from the outside during a burglary, but is often done from the inside. Thus, fraud can quickly be established.

Claiming more damages than actually suffered

The most common form of insurance fraud is claiming damages for extra items that should not have been claimed at all. Examples include an extra phone after a burglary, when it was not stolen, or a few old dents in the car after an accident, which have been there for a long time. The actual damage is expanded and exaggerated, leading to hopes of higher compensation from the insurance company.

Pretending harm or distorting the facts

Insurers often see people who pretend there is damage when there is not. For example, a laptop reported stolen when they themselves lost it. Also, stories are changed from rejected claims so that it falls within the coverage. The facts are changed, in a way that the insurer will have to pay out an amount.