Notice: This article’s stats come from 3rd-party sources and do not represent the viewpoints of this site.
Like a whole lot of white-collar crimes, insurance coverage fraud is usually considered significantly less significant than violent or drug-connected crimes, but it can be even more serious. Provided the astronomical figures associated with the criminal offense, insurance policy fraud is amid the more significant white-collar crimes out there. Let’s check out some of the most exciting stats and details about insurance fraud.
Top 11 Insurance Fraud Statistics and Facts
- Insurance fraud costs American consumers approximately $80 billion per year.
- Medicare fraud costs Americans an estimated $60 billion per year.
- In 2020, there was $3.2 billion of health fraud insurance claims.
- Improper Medicaid payments totaled $98 billion in 2021.
- In 2020, an estimated 8,898 cars were intentionally set on fire in the US.
- Car insurance scams damage companies to the tune of $29 billion per year.
- 68% of Americans aren’t widely aware of common car insurance scams.
- 20% of Americans surveyed admitted to lying to their car insurance provider.
- Millennials are 77% more likely to fall for insurance scams that start with emails.
- Oregon is the only US state without insurance fraud laws.
- The average prison sentence for an insurance fraud conviction in the U.S.A is 30 months.
1. Insurance fraud costs American consumers approximately $80 billion per year.
(Coalition In opposition to Insurance policy Fraud)
In conditions of earnings, insurance policy fraud is the 2nd premier prison activity in the US. Insurance coverage fraud will increase rates for regulation-abiding customers, drives inflating client excellent charges, and places genuine insurance policy claimants at chance. Plus, organizations risk going out of enterprise due to fraudulent insurance policies.
2. Medicare fraud costs Americans an estimated $60 billion per year.
(USC Center For Elder Justice)
Medicare fraud is rampant throughout the US, as a lot of beneficiaries are not able to do their own paperwork or govern what happens with their positive aspects. Con artists can worm their way into property healthcare methods and monthly bill fraudulent bills whilst pocketing the funds them selves. Intentionally lying on paperwork to obtain extra advantages is also commonplace.
3. In 2020, there was $3.2 billion of health fraud insurance claims.
(Coalition Against Insurance policy Fraud)
Fraudulent wellness insurance policy promises operate the gamut from people lying about their name or medical historical past to get benefits all the way to straightforward drug-seekers seeking to get their repair compensated for. Either way, these fake promises harm all Individuals in the sort of enhanced rates and lengthier wait around times because of to investigations.
Insurance Fraud Scam Statistics
4. Improper Medicaid payments totaled $98 billion in 2021.
(Georgetown College)
This is really challenging to in fact parse because a substantial quantity of these poor payments are simply owing to inaccurate or missing details on filed paperwork. Also well worth noting are glacial bureaucratic processes that make distributing precise data difficult.
5. In 2020, an estimated 8,898 cars were intentionally set on fire in the US.
(Coalition In opposition to Insurance policies Fraud)
A lot of men and women who are down on their luck set their very own automobiles on fire every yr to try out and acquire the insurance policies cash, and not necessarily to get a new vehicle. Another related rip-off involves reporting a missing vehicle to try out and accumulate the insurance policies as nicely as offer the vehicle, successfully obtaining paid out twice.
6. Car insurance scams damage companies to the tune of $29 billion per year.
(Coalition From Insurance policies Fraud)
Insurance companies rake in the dough, but they commit a good deal of money combating fraud, way too. Car insurance coverage cons price companies hourly labor, investigations, bureaucratic fees, and other difficult and high-priced work. This is then handed on to clients in the type of improved rates.
Insurance Fraud Awareness & Prevention
7. 68% of Americans aren’t widely aware of common car insurance scams.
(ValuePenguin)
Some of the most widespread insurance cons target clients at an person stage, like people providing to replace your broken windshield. These individuals then bill your insurance policy company an exorbitant amount of money. Other ripoffs contain tow trucks that improperly tow autos and drive folks to spend to get their car again.
8. 20% of Americans surveyed admitted to lying to their car insurance provider.
(ValuePenguin)
The most frequent motives men and women lie to their insurance firms are to lower their premiums by lying about their tackle or how several folks live in their home. There are also some instances where individuals claim injury to their car that did not occur to pocket restore money.
9. Millennials are 77% more likely to fall for insurance scams that start with emails.
(Coalition Against Insurance Fraud)
The same stat reports that millennials are far less likely to fall for scams over the phone. This indicates a shift in scam technology from fast-talking phone con artists to more widespread email scam campaigns. Millennials are less likely to talk on the phone than others, but they use email, so how else are you going to scam them?
10. Oregon is the only US state without insurance fraud laws.
(Insurance Information Institute)
This is a bit disingenuous because Oregon has laws that prohibit insurance fraud, but they go by different names. The language in their laws is different from most other states’ laws in that they don’t have a specific definition for insurance fraud. They do convict people for insurance fraud, though!
11. The average prison sentence for an insurance fraud conviction in the US is 30 months.
(United States Sentencing Commission)
In some cases, this is seen as too low, considering the large scale some criminals work on. It’s also notable that white-collar crime, like insurance fraud, tends to receive more lenient sentences than violent or drug-related crimes.
Frequently Asked Questions About Insurance Fraud
How serious is insurance fraud?
Extremely, really serious. Insurance policies fraud is the single most common white-collar crime in the US, and insurance policies companies have gotten smart to most tactics criminals use. Even in seemingly harmless situations, like lying to get a lower quality, the end result can be improved fees to other consumers and higher difficulty obtaining insurance policy in the potential.
How bad is an insurance fraud conviction?
Insurance policy fraud convictions are really significant simply because they can avert you from getting insurance coverage in the long term, and if you do get insurance coverage, your costs will be larger. You are a documented liability to insurance coverage organizations, so they have no obligation to go over you even if you have a wonderful credit score rating.
How can I protect myself from being a victim of insurance fraud?
There are a number of ways you can protect your self from insurance fraudsters. The most important factor is to in no way let others strain you into having to pay for or carrying out some thing you are uncomfortable with.
An additional way to defend your self includes getting a next view about any insurance coverage buys, as others may possibly be ready to location a rip-off. Finally, you ought to examine the skilled online presence and track record of anybody you do company with. Individuals with little on the web existence are a lot more probably to be scammers.
What are some examples of insurance fraud?
It’s understandable to be a bit puzzled, thinking about how extensive the definition is. Exaggerated insurance promises are fraud, and lying on insurance policies paperwork to get a lower premium is fraud. Other cases contain faking a car accident, arson, dying, or harm. Whilst some are clearly far more serious primarily based on the fees associated, they’re all fraud and can technically be punished in the same way by the regulation.
What if I accidentally commit insurance fraud?
The legislation need to demonstrate that you deliberately committed fraud. So, if you unintentionally omitted details on paperwork or forgot to inform the insurance coverage company anything, which is not fraud. It would only be fraud if you purposely lied to acquire some kind of financial or tangible reward.
Insurance policies fraud is 1 of the biggest unlawful pursuits in the US, and it is not most likely to go absent any time shortly. As prolonged as you use typical feeling and really do not permit criminals pressure you, your odds of staying protected from insurance policy fraud are great.
Showcased Graphic Credit score: Shutter_M, Shutterstock
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