The country’s insurance industry consists of an estimated 7,000 companies, collecting more than $1 trillion in premiums each year, according to the latest figures from the Federal Bureau of Investigation (FBI). The law enforcement agency adds that because of its sheer size, the sector contributes significantly to the cost of insurance fraud by providing bigger opportunities and financial incentives to those committing illegal acts.
The Insurance Information Institute (III) defines insurance fraud as a “deliberate deception perpetrated against or by an insurance company or an agent for the purpose of financial gain.” Such illegal acts may be committed by applicants, policyholders, third-party claimants, and even the insurance brokers and providers themselves.
According to the institute, some of those who commit insurance fraud include:
Common acts of fraud these people perpetrate include “padding,” or inflating claims, misrepresenting facts on an insurance application, submitting claims for injuries or damage that never occurred, and staging accidents.
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