Insurance Fraud FAQ’s
The Coalition Against Insurance Fraud defines Insurance Fraud as deceiving an insurance company or agent in order to collect money to which you are not entitled. Insurance fraud can be “hard” or “soft.”
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Hard Fraud
Deliberately faking an accident, injury, theft, arson or other loss in order to collect money illegally from insurance companies.
Soft Fraud
Telling “white lies” to an insurance company, such as understating the number of miles you drive in a year, or where you live (in order to lower your premium).
How Does Insurance Fraud Affect You?
Some may think that this type of fraud is acceptable, and that insurance fraud only affects the insurance companies, and their bottom lines. In reality, all policyholders are the victims of insurance fraud. Policyholders pay for insurance fraud in the form of higher insurance premiums.
According to the National Insurance Crime Bureau (NICB®):
- The property-casualty insurance industry pays out about $20 billion a year in fraudulent claims.
- At least 10 percent of all property-casualty insurance claims are either inflated or outright fraudulent.
- Fraud is the second most costly white-collar crime in America.
- Insurance fraud raises insurance premiums by approximately $300.00 per year, per household.
- Reporting a loss that did not happen
- Staged accidents
- Misrepresenting where you live, in order to secure a lower insurance premium
- Misrepresenting the way a loss occurred
- Including previously existing damage to a car when submitting a claim
- Withholding information, such as traffic tickets, past claims, number of drivers in a household and other insurance in force
- Allowing a doctor or lawyer to misrepresent damages, lost wages or injuries resulting from a claim, in order to get a higher insurance settlement
- Allowing any party to misrepresent a claim on your behalf
How Can You Avoid Being a Victim of Insurance Fraud?
- Report all automobile accidents immediately
- Make sure that you get the names, addresses, phone numbers, license plate numbers and insurance information for all parties involved in an accident. Include witnesses, if possible.
- Make notes at the accident scene about what each party said happened. This information could help prosecute an insurance fraud artist.
- Be suspicious of any doctor or lawyer who tells you that they can make you money
- Review hospital and doctors bills, to ensure that you received the treatment that they billed for
- Beware of anyone who is anxious to leave an accident scene before the police arrive
How Do You Report Insurance Fraud?
If you suspect insurance fraud call the police, your Insurance Representative, or the National Insurance Crime Bureau.
NICB Hotline: 1-800-TEL-NICB
MAIF Hotline: 1-800-500-0333
Hotline Calls are Free and Anonymous
What is MAIF Doing to Combat Insurance Fraud?
MAIF has created a Special Investigations Unit specifically to detect and deter Insurance Fraud. MAIF is a member company of many anti-fraud organizations, including the International Association of Auto Theft Investigators (IAATI), the National Insurance Crime Bureau (NICB) and the International Association of Special Investigation Units (IASIU). MAIF also participates in many community outreach events, using the forum as a way to educate the public about detecting and deterring Insurance Fraud. MAIF is a proud sponsor of the MD-DC ACT Hot Car and Vin Etching.
