Insurance fraud results in estimated losses in the United States of over $306 billion annually. These losses not only impact insurance companies, but ultimately affect consumers through higher premiums.
Common types of insurance fraud
Insurance fraud takes many forms.
A person may intentionally destroy insured property or inflate the amount of losses. For example, a person may stage a motor vehicle accident, submit inflated repair bills and work with a corrupt medical provider to submit false or inflated medical bills.
Similarly, medical providers may use middlemen to recruit “patients” to stage accidents and then bill for multiple visits that never occur.
Medical ID theft is another form of insurance fraud that costs insurers millions of dollars. In essence, an uninsured patient impersonates another with health insurance so that treatment is billed to another person’s insurer.
Following a natural disaster, unscrupulous contractors may persuade homeowners to submit unnecessary or exaggerated claims or may bill for work never performed.
Whatever the form, insurance fraud is costly.
Insurers are fighting back against fraud.
Many insurers use advanced analytic software to recognize and flag potential fraudulent activity for further investigation.
State and federal laws are also targeting insurance fraud by providing for civil sanctions and criminal penalties for fraudulent activity. In some cases, insurance companies are turning to civil litigation to recover losses from fraudulent activity.
Another powerful tool in fighting insurance fraud is the watchful eye of an insured person. If you believe a contractor or medical provider is over-billing your insurance company, report your concerns.
An experienced attorney can help you with any issues related to your insurance coverage or potential insurance fraud.