What insurance fraud entails.
While telling a small lie or concealing the truth might not seem like a big deal, it can cause a serious issue when it comes to your insurance. This is because being anything less than truthful with your insurance provider constitutes insurance fraud. But what exactly is insurance fraud and why is it so bad? Here’s what you need to know.
What is Insurance Fraud?
In general terms, insurance fraud is lying to an insurance company in an attempt to receive compensation or undeserved benefits. Insurance fraud can take different forms. For instance, lying on your insurance application, exaggerating your damages during an insurance claim, or filing a fake claim are all instances of fraud.
Understanding the Different Types of Fraud
Legally, there are two main types of fraud: hard fraud and soft fraud. A person committing hard fraud might fake an injury, theft, or accident and file a fake claim with their insurer in hopes of receiving compensation. Soft fraud is like a smaller scale version of hard fraud. A person committing soft fraud might have a legitimate insurance claim, but they exaggerate their damages in the hopes of receiving additional monetary compensation. While soft fraud doesn’t seem as bad as hard fraud, it’s important to understand that it is still highly illegal and punishable by various penalties.
Consequences of Insurance Fraud
If you are caught committing insurance fraud, then the penalties can be very severe. While soft fraud is considered a misdemeanor in many states, it is still punishable by fines, probation, community service, and even imprisonment. Hard fraud is always considered a felony, and the perpetrator can be charged with over a year of jail time, major fines, and restitution payable to the insurance company.
Reporting Suspected Insurance Fraud
If you suspect that someone has committed insurance fraud, it’s important that you report them to the authorities. This is because perpetrators that get away with fraud once will often continue their schemes until they are forcefully stopped. Before you report your suspicions, gather as much information as possible. For instance, you will need to know the fraudster’s name, their insurance provider’s name, and the dates during which the suspected fraudulent activity took place. The more evidence you have, the stronger your case will be. You can report suspected fraud to the following authorities:
- State Bureau for fraud
- The involved insurance companies
- State medical board (for healthcare insurance related fraud)
- The National Insurance Crime Bureau
This is what you need to know about insurance fraud and why you should not take this issue lightly. Do you need help with your personal insurance? If so, then contact the experts at Weeks & Associates Insurance Services in Thousand Oaks, California. We are ready to assist you with all your coverage needs today.