Practically, insurance fraud is an illegal offense where not only one person but several others become victims too. When a fraudster cheats an insurance company, it is the people who are cheated the most. Those normal consumers pay regular premiums on their insurance, but still, their cost goes up. Why? It’s because the loss suffered by insurance companies are directly affect the honest consumers.

As per the statistics, around $80 billion losses are listed per year on account of insurance frauds.

But being a common folk you can prevent insurance frauds. So, what do you need to know about it? You should know the most common insurance frauds initially.

  1. Stolen cars

Fraudsters use the scenario of “stolen cars” to commit two types of insurance fraud. First, the actual owner sells the car to a body shop owner for spare parts, and claim it to be stolen. In the body shop, the car might get modified and the legal authorities wouldn’t recognize that an insurance fraud has occured. Secondly, owner hides the car and claim that it has been stolen somehow.

Moreover, the insurance company wouldn’t be able to get their money back from these fraud car owners even after they find them physically.

  1. Car accidents

Many of the accidents that are claimed for insurance are actually insurance frauds. It was normally found that the accidents were staged, and the driver and the victim planned the whole thing. Sometimes, the fraud was planned so big that it involves many fake witnesses and even the insurance investigators are also involved. In such fraud cases, the damage falls upon the car and harms its value. Those fake insurance claims are made with the increased value of the car and the cost of the damages.

  1. Health insurance billing

It was found that health care experts and agents are involved in such frauds. People are making fake insurance claims like overhyped billing for insurance company towards treatments that was never given. For example, instead of mentioning regular checkup in the prescription, the doctor would bill the insurance company for an in-patient surgery. Here, the patient may be the real loser but he might have no idea what had happened with his insurance.

  1. Home insurance coverage

A home is the most precious thing most people own, and it is also the biggest source of insurance fraud cases. Normally, homeowners will shift all the costly items and then damage the house by setting out a fire. Later they make the claim to the insurance company. Similarly, people, who have storm damage to their homes, make insurance claims by enhancing the damage manually and trying to get as much as possible from the policies that cover natural disasters.

  1. Unneeded medical practices

You might face a situation when your doctor may prescribe you some unrelated tests. If you recognize such tests, you might be a victim of insurance fraud.

For example, if you are suffering from stomach problems and your doctor suggests an E.C.G or a C.T scan test instead of blood and stool test, you are most likely getting into an insurance fraud trap.

  1. Faked death

Plain and simple….an insurer normally faked his death after making his spouse the only beneficiary. In such kind of insurance frauds, the criminal will file an insurance policy of his own life, making the spouse as the only beneficiary. After few months, the insurer will fake his/her death and the spouse claims all the money and benefits. After the funeral, the spouse may move to another city where they can reunite and enjoy the coverage money. This is a strong criminal offense, so insurance company always releases the money after proper verification.

So, these are the most common insurance frauds you’ll get to see now. You can avoid being conned, you just need to be aware and check out each and every document before submitting any insurance claim.

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