Insurance fraud occurs most often when an insured individual or entity makes a false or exaggerated insurance claim, seeking compensation for injuries or losses that were not actually suffered. Insurance fraud can also be committed upon customers, through 1) the sale of unlicensed or bogus insurance coverage to unsuspecting clients, or 2) an insurance broker or agent's diversion or theft of insurance premiums paid by clients.
Definition of Insurance Fraud
Insurance fraud refers to any duplicitous act performed with the intent to obtain an improper payment from an insurer. Insurance fraud is committed by individuals from all walks of life. Law enforcement officials have prosecuted doctors, lawyers, chiropractors, car salesmen, insurance agents and people in positions of trust. Anyone who seeks to benefit from insurance through making inflated or false claims of loss or injury can be prosecuted.
The pervasiveness of insurance fraud drives up costs for all consumers and costs the insurance industry billions of dollars each year. One authority estimates that the annual value of insurance fraud approaches $150 billion. Detecting insurance fraud is difficult because of the surreptitious nature by which the criminal perpetrates the fraud.
Depending on the specific issues involved, an alleged wrongful act may be handled as an administrative action or law enforcement may handle it as a criminal matter.
Types of Insurance Fraud
Police and prosecutors typically refer to an insurance fraud scheme as either "hard fraud" or "soft fraud."
Other common examples of insurance fraud include:
Typical Elements for Fraud
In any insurance fraud case, there are certain elements that must be proven beyond a reasonable doubt in order for criminal penalties to apply. While each state may have additional elements for certain specific types of insurance fraud, the core elements often include:
Whether these elements are proven will depend on the evidence in a case, specifically, the evidence that could be admissible at a trial.
Talk to an Attorney About Your Insurance Fraud Case
Fraud crimes may result in long prison terms and enormous fines, depending on the circumstances surrounding the charges and the amount of money at issue. As such, the advice of qualified legal counsel can be invaluable. Contact a local defense attorney, who can discuss the charges against you and the defenses you may have available to you.