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Understanding the ins and outs of insurance fraud

Insurance fraud remains a major problem throughout the United States, with many individuals and companies partaking in this illegal activity every year. In short, insurance fraud is any act performed with the objective of obtaining improper payment from an insurance company.

Anybody can be charged with insurance fraud. It doesn't matter where you live, how much money you earn or your profession, there is a chance that you could get caught up in this type of scheme.

Did you know that the annual value of insurance fraud is approximately $80 billion? With this in mind, it is easy to see why the authorities are so caught up in cracking down on this type of crime.

There are two general types of insurance fraud: soft fraud and hard fraud.

Soft insurance fraud is typically associated with relatively honest people who tell small lies to their insurance company in an attempt to maximize a claim. These people may not think they are doing something wrong, but it's a crime nonetheless.

Hard insurance fraud is a deliberate attempt to fake an accident or any type of loss in an attempt to illegally collect compensation. Sometimes a person acts alone. Sometimes a group of people conspire to commit this type of crime.

It's important to understand the ins and outs of insurance fraud, as you don't want to find yourself charged with this type of crime. Due to the fact that it costs the country so much money, there are times when a person is charged with this crime when they are innocent.

Source: FindLaw, "Insurance Fraud," accessed Feb. 26, 2016

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