Insurance Fraud Raises Prices for more than just Policies

When people deceive insurance agents or companies to collect money they are not entitled to, this is considered fraud. Consumers can also be defrauded by agents or insurance companies. Fraud can be considered soft or hard. Soft fraud happens when people embellish facts to obtain more money. For example, a policyholder might exaggerate the value of an item stolen from his or her home to receive a higher claim payout, or a business owner may say there are less employees than there actually are to avoid a higher workers’ compensation premium. When people deliberately fake losses to their vehicles, homes or businesses, this is considered hard fraud. They may act alone or be part of a crime ring. Why Everyone Should Worry Insurance fraudsters are picking the pockets of consumers so they can pad their own. Insurance fraud is becoming one of the biggest crimes in the United States. It happens on a daily basis in all 50 states. People who commit this type of fraud come from all backgrounds and fall into all age groups as well as income brackets. The same is true of victims of this crime. According to insurance experts, fraud schemes are responsible for consuming about $80 billion every year. It is important to look past the high costs. Careers, families, businesses and finances can be destroyed by insurance fraud. Honest and hard-working people are the ones who ultimately pay the price for it. People may lose their savings over investment schemes when they trust the wrong people. Older individuals are especially vulnerable to this. Consumers’ health conditions are also in danger sometimes. If they buy health insurance policies that come from swindlers, they find out the hard way that they actually have no coverage or very little. Alternately, they may receive inadequate care that is inflated in price to maximize insurance claims. When these things happen, insurance premiums will assuredly remain high. Home and auto insurers must pass the costs of dealing with fraud on to their customers. This means the prices of consumer goods will be higher. When businesses pass on higher costs, they do so through the price tags on their goods or services. In addition to this, honest businesses end up losing money, and these losses total into the millions every year. When fraud causes increases for employee health coverage, they must make their workers pay more as well. Fraud can cost good workers their jobs, health coverage and even their future careers if their employers go bankrupt due to being scheme victims. Innocent individuals may even be injured or killed. Some of the more sinister schemes involve staging fires or auto accidents. Heartless crooks do not care that victims may be families and even little children or pets, and some people are murdered so a beneficiary can attempt to claim the life insurance benefit. It is important to report suspected fraud immediately. To learn more about how to report insurance fraud or for further information on this topic, call ACBI at 203-259-7580 or visit our website.

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