Tips For Preventing Insurance Fraud

Credit card fraud is something that consumers watch out for, but many do not consider the dangers of insurance fraud. Though insurance fraud isn’t a violent crime, it’s one that costs companies billions of dollars each year. To prevent the number of fraudulent insurance cases, it takes a village.

In this post, we’ll discuss the common types of insurance scams and how to prevent insurance fraud. If you know of someone committing fraud, please contact the National Insurance Crime Bureau at 800-835-6422 or fill out this form.

Common Types of Insurance Scams

Not all people who commit insurance fraud are part of a crime ring. Some are normally honest people who see an opportunity to make money. The areas that are believed to have the highest number of fake claims are automobile accidents, medical claims, and workers compensation.

Here are a few examples of what insurance scams look like:

  • Not disclosing household drivers on auto insurance, such as teenagers or those with suspended licenses.
  • Hiding the commercial use of a vehicle to obtain a cheaper personal automobile policy.
  • Claiming a vehicle was stolen, when really, it was sold for parts.
  • Inflating the damage that occurred in a car accident or staging the collision.
  • Staging a home fire or enhancing storm damage.
  • Charging patients for services never rendered.
  • Scheduling unnecessary procedures for patients.

Top Tips for Preventing Insurance Fraud

Insurance companies lose around $30 billion a year in insurance fraud costs. This gets passed down to consumers who have to pay higher premiums. Working together to understand what insurance fraud is, how to detect it, and where to report it can help all of us. Getting in front of fraud is important, because once it happens, it’s expensive to fix.

Here are the top tips for preventing insurance fraud.

  • Get a copy of your policy. Obtain physical copies of your coverage. If you’re unsure of your coverage, ask for an insurance review. Sometimes, agents or brokers victimize consumers by not giving them the coverage they’re paying for.
  • Get proof of payment. Always pay your premium to the insurance company – not the individual agent or broker. Keep all receipts on hand.
  • Pay only for services received. If you had a mental or dental procedure, only pay for the services rendered. Check all Explanations of Benefits (EOBs) to be sure that you weren’t charged for additional services.
  • For accidents, contact the police. If you are involved in a car accident, call the police and take photos of the damage. Common insurance scams include inflated claims and staged accidents.

Knowing your agent or broker is a helpful way to prevent insurance fraud. Soden Agency provides individualized consultations and insurance that is tailored to your exact needs. You’re in good hands with us! Call us today at 732-521-0001 for your free quote.