Insurance fraud is one of the most common white-collar criminal offenses, and yet it is one that many people fail to understand. Insurance fraud occurs at both the individual and institutional levels and affects the economy negatively to the tune of billions of dollars annually.
People who hold policies can commit insurance fraud, and so can agents or adjusters working for insurance companies. Businesses, like medical practices, are also major sources of insurance fraud.
When you understand the elements of insurance fraud and what kind of behavior could lead to insurance fraud allegations, you will have an easier time identifying questionable behavior in professionals that you interact with and also in avoiding potentially fraudulent mistakes on your own part.
What are the elements of insurance fraud?
The first and most important element of insurance fraud is someone intentionally and knowingly misrepresenting a situation. They provide inaccurate information in the hopes of financial gain.
The second element of insurance fraud is that it directly relates to an insurance claim, an insurance application or an individual insurance policy. Finally, the false information must influence the outcome of an application for insurance or an insurance claim.
When all three of those elements exist, the situation may involve insurance fraud and could potentially even lead to criminal charges.
What are some examples of insurance fraud?
Some of the most common insurance fraud schemes involved businesses or professionals improperly billing for their services. Medical facility that treats older adults might bill for appointments that never occurred and assume that their patients would never know the difference.
Individuals can also engage in insurance fraud. Someone might fake an injury after a car crash to try to claim medical benefits, or they might report household items as stolen or damaged in a storm to replace them when they simply want an upgrade.
The bigger the impact of the alleged insurance fraud, the more likely it is that the individual accused will face criminal charges. Insurance fraud charges could lead to jail time and financial penalties for the person accused. Educating yourself about insurance fraud and other white-collar offenses can help you avoid making a potentially criminal mistake.