6 Examples of Insurance Fraud

There are countless examples of insurance fraud. However, some fraudsters do not view their actions as insurance fraud. It may sometimes seem like a minor, harmless offense. Still, it’s best to be careful, because committing fraud can have serious consequences. There are various types of insurance fraud, such as:

• Lying or Concealing Information When Applying for Insurance
• Intentionally causing damage
• Claiming more damages than were actually incurred
• Pretending that damage has been suffered or distorting the facts

To clarify exactly what insurance fraud is, we’ve provided six examples of insurance fraud below.

#1 Adjust your insurance coverage, bbefore you file a claim

A clear example of insurance fraud is changing your insurance coverage before you file a claim. Suppose you hit a pole and end up with a significant dent in your car. With your liability + limited comprehensive car insurance, damage to your own car isn’t covered. That’s why you quickly upgrade your coverage to liability + full comprehensive before filing a claim. Then, damage to your own car caused by your own fault is covered, and you’ll receive a payout from your insurer. In other words, you’re filing a claim for an old incident under the new coverage.

#2 Lying or withholding information on an insurance application

It seems like such a small thing—answering “No” to a question that you should really answer “Yes” to. However, the insurer asks these questions for a reason. An insurer wants to get a clear and complete picture of exactly who and what they are insuring. That’s why they always ask a policyholder a number of underwriting questions before deciding whether to accept the application or not. An insurance contract is based on trust. If you withhold information or lie on your insurance application, the insurer cannot trust that you will comply with the insurance rules. You are deliberately misleading the insurer in the hope that they will accept your insurance application. This is considered a form of insurance fraud.

#3 A car accident or burglary at scstaging a car accident or a break-in

Another example of insurance fraud is staging a car accident or a break-in with the aim of collecting insurance money. It’s up to the insurer to prove that the incident was staged. In some cases, this isn’t difficult—for example, if a window was smashed from the inside or if there were accomplices willing to talk. Did you put other people in danger by staging a car accident or burglary? If so, the penalty could be more severe than you think.