When there is an involvement of deception in the insurance process, that is insurance fraud. It can be a case of someone making a claim that is fake from an insurance company. Also, it can be an insurer’s refusal to pay the claimant. Statistics show an increase in the number of insurance frauds committed worldwide. Greed is the motive behind insurance frauds. People always look to make financial gains through insurance frauds.
Here are types of insurance frauds committed globally
This is when a claimant furnishes information that is false to the insurance firm to receive benefits from the company. Insured people commit this type of fraud through common ways of allowing someone else to use their policy information and claiming the incurred amount to pay for prescriptions that are not prescribed by their doctors.
Medical providers also commit this type of fraud. They may bill for services not provided, supplies they have not used, or alter claims that are existing.
Health insurance firms commit this type of fraud as well. They may delete the claims from their records, refuse to pay the claimant or deny coverage for parties that are genuine.
People take policies to insure their lives. When there is a good amount due, they fake their death, and the beneficiaries claim the money. They later appear to claim that they are suffering from the loss of memory.
In this type of fraud, individuals intentionally damage their properties to make a claim. They may damage goods that are of less value and claim a higher amount. People fake even theft to make a claim. People sometimes claim the second insurance after their losses have been covered by one insurance firm.
People stage collisions and accidents to claim insurance. Also, it may be claimed for damages that were there long before the taking of the policy. Sometimes individuals make coverage claims for an accident that may have occurred before the policy was taken.
Insurance frauds are common, and they impact the society as a whole. Insurance companies have incurred heavy losses due to fraudulent claims and to make up for the losses, they have raised the policyholders’ premiums making honest citizens to pay the price for what is not their fault.