A lot of people think insurance fraud is a victimless crime. It isn't. The real victims of insurance fraud are not insurance companies, but you and other customers who must pay increased premiums caused by fraudulent activity. The Coalition Against Insurance Fraud estimates that insurance fraud costs Americans at least $80 billion a year, or nearly $950 for each family in additional premiums to cover the cost of insurance fraud.
In fact, insurance fraud is the second costliest white-collar crime in America after tax evasion. According to the National Insurance Crime Bureau (NICB), property/casualty- based insurance fraud costs Americans $20 billion annually. Health insurance fraud and other types of insurance fraud add from $80 billion to $100 billion to the bill. In contrast, Hurricane Andrew cost only $17 billion.
One of the reasons insurance fraud is so widespread is that many otherwise honest people tolerate it. These statistics, gathered in a survey by Accenture in February 20031, show just how permissible adults believe insurance fraud is:
- 24 percent of people surveyed said it is acceptable for people to overstate the value of their claims to the insurance companies.
- About one in 10 people agree it’s ok to submit claims for items that aren’t lost or damaged, or for personal injuries that didn’t occur.
- Nearly 40 percent of people admitted they are not likely to report someone who they knew committed insurance fraud.
Any way you look at acts of insurance fraud, they are crimes. The claimants, auto repair shops, medical providers, or others involved in such fraudulent activity can be arrested and prosecuted. These crimes cost all of us money. And that's why you should take action as soon as you suspect an insurance fraud is happening.
