Insurance Fraud-Fraud at a Premium!
Insurance related scams and insurance fraud are not that popular as some of its other scam and fraud siblings. But what insurance fraud and insurance scams lose out on numbers they make up for it by the sheer amount of money involved in each such scam and fraud. Insurance fraud is a fraud which can be correctly termed as-Fraud at a Premium. If a recent estimate is to be believed insurance fraud costs customers between $130 billion to $150 billion.
Insurance fraud basically involves a fake claim in order to gain financial benefits, but there is a flip side to insurance fraud wherein insurers (insurance companies) dupe their customers by denying what the customer is lawfully entitled to.
Insurance fraud can be divided into two categories:
1.Fraud involving a fake or deliberate vehicle accident, break-in, loss, injury etc.
2.Employee compensation fraud, wherein employees mis-informing the employer about their health so that they are entitled to employee’s compensation- This is the most difficult of insurance fraud that can be detected.
The psychology working behind insurance frauds and scams is the acceptance of the fact that such scams and frauds do not harm anyone and that the insured is claiming what rightfully is their’s. What we fail to understand is the basic principle that whenever a insurance fraud takes place they add up to a losses which insurance companies incur and as a result each and every one of us ends up by paying increased amounts of premium each year.
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