Crime causes insurance premiums to increase. Insurance fraud is a crime. During a recession research shows that there is an increase in fraud in insurance.
Consumers do know right from wrong but during a financial crises desperate consumers do things that are not always right. Insurance fraud costs insurance company’s billions of dollars annually, and that is not just when we are in recession. Insurance companies have to make up for the premium they lose to fraud insurance claim. They need premium dollars so they have enough money to pay for your legitimate claim if you ever have one.
But how does insurance fraud impact you? Fraud in insurance claims does increase your insurance premiums even if you personally do not engage in fraudulent acts.
There are many types of insurance fraud. And fraudulent acts are not always obvious. They range in severity from slightly exaggerated to deliberately caused. There is what’s called “hard fraud vs soft fraud”. Hard fraud is when someone deliberately plans a loss or a claim. Soft fraud would be an exaggerated loss or inflating the claim or “padding” the claim.
Bogus medical claims, “padding” the medical claim or inflating the bill, fake food contamination are all examples of fraud.
Fraudulent Health Insurance enrollment and workers comp fraud schemes are fraud claims that impact businesses.
All insurance fraud effects you.