Insurance fraud has been in existence since the insurance sector was invented. There are many types of insurances to choose from and this also means more chances of fraud claims of insurances. There are many types of fraud from auto insurance fraud to life insurance fraud. In this article I will try to let you know all about insurance fraud and its impact on society. It is known fact that people does this just to make some extra money than they are entitled for. It is the nature of most insurance that gives opportunity to go ahead and do such illegal thing. The most common instances of fraud claims are those when people claims more loss than that has actually occurred or inflating the value of the item that is stolen, lost or gone bad.
There are two types of insurance fraud that are found. One is known as hard fraud and the other is known as soft fraud. The most common type of fraud that occurs in the insurance sector is the soft fraud. This is a kind of opportunistic fraud. This occurs when the person tries to inflate a claim that is already a legitimate one. For instance, when someone is involved in a car accident they usually go to the length to say that the car met with more damage than it actually happened. This is a type of fraud that happens during the early stages of a new insurance policy. This is when a person who is getting the insurance falsifies documents or not being totally honest with the situations they are in with the insurance company. This is done by people to get a lower premium. For example, when someone is getting a car insurance policy they knowingly lie about the miles on the car in order to attract a much lower premium than they are entitled for.
This is a situation when someone plans a mishap in order to get the benefits of the insurance policy. Some of the most common instances of hard fraud are fire, stolen vehicles and any other plans that are made by an individual person. It has also been found out that in some severe conditions, entire crime rings are devoted to get away and plan hard fraud insurance. A recent example can be given which became a national news piece is when a man named John Darwin suddenly disappeared and could not be found in the year 2002, while he was taking a trip on a canoe. It was then when his family collected all the benefits on his life insurance cover but then he mysteriously appeared in the year 2007. He then claimed to say that he has no recollection of anything and that he was indeed suffering from memory loss. The most common type of insurance fraud is the auto insurance fraud. It has been reported that in the year 1996, almost close to 36 percent of all auto claims were indeed false claims in some way or the other. There are many instances of auto fraud which falls in the category of soft fraud that are discussed above, but also when a person claims for an accident that did not actually happened at all. This is the reason more and more insurance companies are setting up insurance fraud investigations in Chicago and insurance fraud investigations in Illinois. Also, the insurance companies can also use the services of investigative services in Illinois. Also, sometimes people uses different address to register their cars to pay fewer premiums as a car registered in a major city will generate more premium than car registered using a suburban address.
By Rose Wiliam