What’s the price of insurance fraud?

Insurance fraud is a serious crime, and believe it or not, the victim is you, and everyone else who has an insurance policy.

The Insurance Journal put out a fact from The Coalition Against Insurance Fraud that estimates there is $80 billion of insurance fraud each year, including life, health, specialty, and property and casualty insurance.

Let that number sink in for a moment. It’s hard to grasp how much even $1 billion is. $80 BILLION.

The reason you are affected by insurance fraud is that insurance companies have no choice but to increase premiums to offset the major losses due to insurance fraud.

Here are a few of the common ways people commit insurance fraud.

1. Faked death. It’s crazy how far criminals will go for money. Believe it or not, a faked death is a form of insurance fraud. The criminal will have a life insurance policy issued for an adequate length of time before they fake their death. The beneficiary (typically the spouse) is paid the death benefit, and suddenly, they go missing too.

2. Staged home fire. Homeowners insurance provides coverage for your home and your personal property inside the home. Typically, the homeowner will leave and hire criminals to set fire to the home. They make sure to have the value of their assets on record to get fully reimbursed for their personal items.

3. Car accident. Two criminals will stage a car accident with the goal of receiving pay out for two totaled vehicles. If you’ve ever been in a car accident, you know just how scary and painful it can be. The lengths people will go to for illegal money is crazy.

4. Stolen car. The insured will sell their car overseas and then report it stolen. That way, they are receiving two payouts on the same car.

5. Storm fraud. When a storm comes, criminals will do whatever they can to enhance the damage with hopes of exceeding the payment they will receive from the insurance company. For example, following a hailstorm, the insured will add more damage using a hammer. The indents from the hammer look completely different than the ones made by the hail.

When someone knowingly makes a false statement to their insurance company with the hopes of getting a payment, it’s a very serious crime. Just like any other crime, there are penalties for committing insurance fraud.

“Soft fraud” is a term that refers to a person exaggerating the damages from a claim. The penalty for soft fraud is fines, jail time (up to one year), community service, and probation.

“Hard fraud” refers to when a person stages a loss with the intention of receiving payment from the insurance company. The penalty for hard fraud could be a number of years in prison.

Honesty is a virtue. Living an honest life is much cheaper for both you and your insurance company.

By: KayLynn P.

We shop so you don't have to, and shop again every renewal.

Leave a Comment





The Sticky Truth: A History of Duct Tape

November 22, 2024

Power Up Your Business with a Blog

November 21, 2024

The Toyota 2000GT: A Game-Changer in the Automotive World

November 19, 2024

The Appalachian Trail: A Hiker’s Dream

November 15, 2024

Down on the Corner: A Business Indicator for the Ages

November 14, 2024

The Ironies of Life Insurance: Why You Need It Now

November 13, 2024

Why Car Insurance Rates Are Rising: A Breakdown of Contributing Factors

November 12, 2024

Stress-Free Landlording: The Benefits of Hiring a Property Manager

November 11, 2024

A Decade of Dumb: 5 Nineties Fads We’d Rather Forget

November 8, 2024

Don’t Let Liability Claims Ruin Your Business

November 7, 2024

6 Simple Steps to a Longer Life

November 6, 2024

Maximize Your Return: Tips for Selling Your Used Car to a Private Buyer

November 5, 2024

Protecting Your Condo: Understanding Condo Insurance

November 4, 2024

Boosting Your Motivation: Tips for Staying Positive and Productive

October 31, 2024

Fascinating Facts About Cars and Driving

October 29, 2024

Moving Made Easier: Tips for a Stress-Free Transition

October 28, 2024

Top 10 Blog Topics: What’s Trending in the Digital World?

October 25, 2024

A Century of Retail: From Department Stores to Online Shopping

October 24, 2024

Using Your Smartphone for Self-Care and Inspiration

October 23, 2024

Electric Vehicles: Beyond the Hype

October 22, 2024

Navigating College Living: A Guide for Parents

October 21, 2024

Radio: More Than Just Noise

October 18, 2024

Protecting Your Business: Why Insurance is Essential

October 17, 2024

Three Numbers That Shape Your Life

October 16, 2024

The SUV Revolution: Porsche’s Cayenne Turbo GT Redefines the Luxury SUV

October 15, 2024

DIY Home Repairs: Easy Fixes for Common Household Problems

October 14, 2024

From Simple to Super: The Evolution of the Red Wagon

October 11, 2024

Protect Your Event: The Importance of Special Event Insurance

October 10, 2024

Your Life Insurance Application: A Blueprint for a Healthier Life

October 9, 2024

Understanding Auto Insurance: A Simple Guide

October 8, 2024

Save on Homeowners Insurance: 5 Simple Tips

October 7, 2024

The Penny: A Relic of the Past?

October 4, 2024

Protect Your Profession: The Importance of Professional Liability Insurance

October 3, 2024

More Than Just a Cup of Joe: The True Cost of Your Daily Brew

October 2, 2024

Driving Down Costs: Long-Term Strategies and Instant Savings on Car Insurance

October 1, 2024

Protecting Your Modern American Dream: A Guide to Homeowners Insurance

September 30, 2024

America’s Party Capitals: Where the Fun Never Stops

September 27, 2024

From Lemonade Stands to Launchpads: The Entrepreneurial Spirit

September 26, 2024

The True Cost of Loss: Why Life Insurance Matters

September 25, 2024

From Keychains to Keyless Entry: The Evolution of Auto Industry Promo Items

September 24, 2024

Clutter Crisis: Common Household Multipliers

September 23, 2024

America’s Spookiest Destinations: A Chilling Exploration

September 20, 2024

Beyond the Daily Grind: Crafting Your Business Exit Strategy

September 19, 2024

Sleep Better Tonight: The Unexpected Benefits of Life Insurance

September 18, 2024

Is It Time for a Car Insurance Checkup? Key Moments to Reevaluate Your Coverage

September 17, 2024

Vanishing Acts: Everyday Items Disappearing from Our Homes

September 16, 2024

Candy Cravings: Sweet Facts and Surprising Truths

September 13, 2024

Young, Healthy, and Underinsured? Why You Need Life Insurance Now

September 11, 2024

Gems: America’s Underrated Zoos

September 6, 2024

Reputation Repair: How to Handle Online Haters and Protect Your Business

September 5, 2024

Career Reboot: Rediscovering Your Passion and Potential

September 4, 2024

Car Crazy: Test Your Automotive Knowledge

September 3, 2024

Earthbound Adventures: 5 US Destinations That Feel Out of This World

August 30, 2024

The Art of Conversation: Asking the Right Questions

August 29, 2024

Time Flies: Unraveling Common Time-Related Phrases

August 28, 2024

Car Crazy: Uncovering the Hidden Truths About Our Vehicles

August 27, 2024

Soaring Costs: Why Building Materials Are Breaking the Bank

August 26, 2024

Are You Normal? Let’s Check the Stats!

August 23, 2024

Beyond the Obvious: Uncovering Your Hidden Competitors

August 22, 2024

Mr. Cheapo’s Bootcamp: Slash Your Spending and Save Big

August 21, 2024

Contact Us

-CONTACT US

OUR LOCATION

Have A Question?

We have an answer. Call us at 719-275-0305
Affordable-Insurance-Plans-Services

Like Us On Facebook!

418 Main St. Canon City, Colorado 81212

719-275-0305

© Copyright 2024 Affordable Insurance Plans & Services Inc.  |   All Rights Reserved
Site by ICA Agency Alliance

418 Main St. Canon City, Colorado 81212
719-275-0305

© Copyright 2024 Affordable Insurance Plans & Services Inc.  |   All Rights Reserved
Site by ICA Agency Alliance