Insurance Fraud Law
What is Insurance Fraud?
Insurance Fraud is the filing of a false claim to life, health, automobile, property, workers' compensation or other types of insurance benefits. Insurance fraud is typically criminal in nature, and regulated by both state and federal laws. Laws against insurance fraud are intended to protect both consumers and insurance companies from fraudulent claims.
Types of Insurance Fraud
Insurance fraud is often classified as either “hard” or “soft.” Hard fraud entails the deliberate plan to invent an insurable loss, such as a car accident, theft, or fire, in order to obtain payment from an insurance company to cover the supposed loss. Many organized crime cartels have had dealings with hard fraud both as a means of stealing large sums of money and as a means of concealing the source of, or “laundering,” illegally obtained funds.
Soft fraud is much more common and sometimes called a fraud of opportunity. In soft fraud, a policyholder exaggerates an otherwise legitimate claim in order to obtain a larger payout. For example, someone involved in a car accident might claim more serious injuries than they actually sustained in order to claim entitlement to a larger settlement. Some have also labeled as soft fraud the misrepresentation of preexisting conditions when obtaining insurance in an effort to obtain coverage that might otherwise be denied or to receive a larger payout in the event of a later insurable event despite preexisting damage.
Laws Against Insurance Fraud
In the United States, both state and federal laws prohibit both soft and hard insurance fraud. The practice has been recognized as a serious crime and a favorite scheme for organized crime, and have, as a result, criminalized insurance fraud. Every U.S. state now categorizes insurance fraud as a crime, though a few states have only criminalized certain types of fraud (e.g., Oregon only criminalized fraud against workers' compensation or property insurance policies). Similarly, the federal government has enacted laws that criminalize fraud and enhance sentences for those convicted should the scheme result in injury or death to a human being.
The problems of insurance fraud are so pervasive that 41 states have insurance fraud bureaus designed to combat illegal insurance activities. These insurance fraud bureaus are essentially law enforcement agencies with the jurisdiction of investigating suspicious insurance claims.
For more information about insurance fraud, please visit the resources below. You can also get answers to your specific questions, as well as assistance with any claims or defenses you may have related to insurance fraud, by visiting our Law Firms page and finding an experienced attorney in your area.
Know Your Rights!
Articles on HG.org Related to Insurance Fraud Law
- Preparing Yourself for an Examination Under OathIn Wisconsin, when you file a fire loss claim, water damage claim, or other property damage claim against your insurance company, your insurance policy most likely allows your insurer to take your examination under oath. What is an examination under oath, and why would you have to attend one if you were filing an insurance claim?
- Pursuing a Bad Faith Insurance ClaimWhen an insurance company has denied coverage, is unwilling to provide a settlement and similar matters, an insurance company may be involved in bad faith claims. This means the carrier is attempting to get out of providing entitled monetary compensation for a policy that has coverage of the damage caused by the incident.
- Intersection between Arson and Insurance FraudArson usually involves at least one other crime when committed such as insurance fraud. This happens when the person that sets the fire also has an insurance policy on the building and causes the immolation for the settlement the carrier would provide.
- Private Investigators and Insurance CasesOne of the most common reasons that private investigators are hired is to assist with insurance cases. In many cases, they try to uncover whether a fraudulent insurance claim has been filed. They do this by conducting an investigation and employing other investigative techniques.
- When Do I Need a Califronia Insurance Coverage Attorney?Individuals and business interests in San Diego are often denied coverage under valid insurance policies. The first question to be answered is: “Does the coverage in my policy cover the specific circumstances of my claim?” The second question to be answered is: “Is the insurance company acting in good faith with respect to my policy claim?”
- Private Investigators Working in Concert with AttorneysJuѕt аѕ lawyers hаvе specializations, Private Investigators dо аѕ well.
- Arson - Why Your Criminal Defense Attorney MattersArson cases can either be charged in federal or state court. In Minnesota, the most common arson charge is arson in the first degree, which charges that the person intentionally set fire to his home or other dwelling, usually for the insurance money or some other financial reason. This is a serious charge that, if convicted, will likely result in at least a 4-year prison sentence. If you or a family member is facing charges of arson, you need an attorney experienced in handling arson cases.
- Seniors Should be Cautious When Purchasing Deferred AnnuitiesFinancial Conduct Authority says the deferred annuities market is messy, so seniors and elders need to be more careful when buying.
- Seniors and Elders Remain Alert for Annuity & Insurance ScamsIn the world of investment, seniors and elders are prime targets for financial scams. To protect yourself, read on to learn about the different schemes.
- The US Department of Justice Joins Whistleblower Lawsuits Against UnitedHealth Group Inc.Whistleblowers brought two False Claims Act lawsuits for Medicare fraud against UnitedHealth Group, Inc. the first in 2011 and the second in 2014. The U.S. Department of Justice joins these whistleblower lawsuits against UnitedHealth Group, Inc. for Medicare fraud.
- All Insurance and Reinsurance Law Articles
Articles written by attorneys and experts worldwide discussing legal aspects related to Insurance and Reinsurance including: bad faith insurance, insurance defense, insurance fraud and medical insurance.
State Insurance Fraud Bureau
Insurance Fraud Law - US
- FBI -Insurance Fraud Overview
The insurance industry consists of more than 7,000 companies that collect over $1 trillion in premiums each year. The massive size of the industry contributes significantly to the cost of insurance fraud by providing more opportunities and bigger incentives for committing illegal activities.
- Fraud Prevention Model Act
This model helps state insurance regulators investigate and discover fraudulent insurance acts more effectively, halt fraudulent acts, and assist and receive assistance from state, local and federal law enforcement and regulatory agencies in enforcing laws prohibiting fraudulent insurance acts.
- Insurance Fraud - Wikipedia
Insurance fraud is any act committed with the intent to fraudulently obtain payment from an insurer. Insurance fraud has existed ever since the beginning of insurance as a commercial enterprise. Fraudulent claims account for a significant portion of all claims received by insurers, and cost billions of dollars annually. Types of insurance fraud are very diverse, and occur in all areas of insurance. Insurance crimes also range in severity, from slightly exaggerating claims to deliberately causing accidents or damage. Fraudulent activities also affect the lives of innocent people, both directly through accidental or purposeful injury or damage, and indirectly as these crimes cause insurance premiums to be higher. Insurance fraud poses a very significant problem, and governments and other organizations are making efforts to deter such activities.
- US Code - Health Care Fraud / Insurance Fraud
Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice - (1) to defraud any health care benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both.
Organizations Related to Insurance Fraud Law
- Coalition Against Insurance Fraud
Flash back to 1993. Spiraling insurance scams were driving everyone's premiums higher and higher. The nation was struggling with a mounting crime wave, looking for answers. Leaders of the anti-fraud fight realized America needed a catalyst to unite and ignite the power of many diverse groups against rampant fraud. Only a longterm commitment would work against such a deeply entrenched problem. The vision of these charter members became the Coalition Against Insurance Fraud — the nation's only anti-fraud watchdog that speaks for consumers, insurance companies, legislators, regulators and others.
- National Association of Insurance Commissioners
The mission of the NAIC is to assist state insurance regulators, individually and collectively, in serving the public interest and achieving the following fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members: Protect the public interest; Promote competitive markets; Facilitate the fair and equitable treatment of insurance consumers; Promote the reliability, solvency and financial solidity of insurance institutions; and Support and improve state regulation of insurance.
- National Conference of Insurance Legislators (NCOIL)
The purpose of NCOIL is to help legislators make informed decisions on insurance issues that affect their constituents and to declare opposition to federal encroachment of state authority to oversee the business of insurance, as authorized under the McCarran-Ferguson Act of 1945.
- National Health Care Anti-Fraud Association
Founded in 1985 by several private health insurers and federal and state government officials, the National Health Care Anti-Fraud Association is the leading national organization focused exclusively on the fight against health care fraud. We are a private-public partnership — our members comprise more than 100 private health insurers and those public-sector law enforcement and regulatory agencies having jurisdiction over health care fraud committed against both private payers and public programs.
- National Insurance Crime Bureau
The National Insurance Crime Bureau is a not-for-profit organization that receives support from approximately 1,000 property/casualty insurance companies. The NICB partners with insurers and law enforcement agencies to facilitate the identification, detection and prosecution of insurance criminals.
Publications Related to Insurance Fraud Law
- American General Life Companies - Fraud Prevention
American General has implemented wide-ranging anti-fraud prevention programs. We do so not only to protect our organization from insurance fraud, but also to protect you, our valued customer. Remember, not only could you become a direct victim of insurance fraud, unchecked insurance fraud also results in higher costs to insurers that may be passed along to customers in the form of higher premiums.
- Consumer Action Handbook - Beware of Insurance Fraud
To avoid insurance fraud: * When shopping for insurance on the Internet, check that the website is secure. Look for the lock icon, a URL that begins "https:" and never provide personal information if you don't trust the site. * Be wary of people selling insurance door-to-door and over the telephone. * Be suspicious if, after an accident, a stranger contacts you to offer “quick cash” or recommends a particular attorney or health care provider. Report the incident to your police department. * Don’t give your insurance identification numbers to companies you don’t know. * Carry a disposable camera in your glove compartment. If you are in an accident, take pictures of the damage and the people involved. Ask for names, telephone numbers and driver’s license information for all those involved. Getting contact information for any witnesses is also a good idea.