What Is Insurance Fraud?
Insurance fraud is probably one of the most accepted illegal acts in the eyes of most Americans. According to the Coalition Against Insurance Fraud, one in ten Americans would knowingly commit insurance fraud and one-third would not report insurance fraud committed by someone they knew. This directly affects your homeowners insurance rates. Last year alone, there were almost five thousand open insurance fraud cases being investigated. These include auto insurance fraud, health insurance fraud and personal property insurance, including home insurance, fraud. This cost insurance companies almost two hundred million dollars last year. As a direct result, insurance premiums were raised across the board to offset the cost. Insurance companies build the cost to prosecute and pursue fraud cases into the premiums.
Insurance fraud in the homeowner industry is another very common occurrence. Most cases involve arson. A residence is purposely set on fire with the intent to file false claims and defraud insurance companies. Arson cases are sometimes difficult to prove and prosecute unless there are obvious signs of arson including use of an accelerant. Insurance companies work tirelessly to prevent and pursue fraud cases and this costs money. Typically, an insurance company will add a standard raise into the premiums across the board. Some may even assess the possibility of you committing fraud. If something in your credit history or past insurance claims raises a red flag with your insurance company they may increase your premiums.
Another type of fraud common with home insurance is filing a false claim. For example, reporting burglaries that never happened or faking a burglary to claim insurance money on lost items. Also reporting damage that never existed will increase homeowners insurance rates for all those insured. Some of the fraudulent cases are so convoluted that they involve many people on many different levels. For example, a homeowner reports someone broke into their home and stole some valuable items. They may have had a friend break in to make the scene look real while they were out of town. Because of this insurance companies are very aggressive in investigating claims. That is why it may seem difficult at times to get reimbursements on items lost or for damages that have occurred. Another form of insurance fraud is when a homeowner files a legitimate claim but pads the claim by reporting items stolen or lost that never existed or by reporting their condition to be better or newer then the actual item.
It is highly suggest that when you are seeking quotes on insurance, you seek at least three free quotes for the best rate! For more info on quotes click: information needed.
