Insurance Fraud


DEFINITION of 'Insurance Fraud'

An illegal act on the part of either the buyer or seller of an insurance contract. Insurance fraud from the issuer (seller) includes selling policies from non-existent companies, failing to submit premiums and churning policies to create more commissions. Buyer fraud includes exaggerated claims, falsified medical history, post-dated policies, viatical fraud, faked death or kidnapping, murder and much more.

BREAKING DOWN 'Insurance Fraud'

Insurance fraud is basically an attempt to exploit an insurance contract. Insurance is meant to protect against risks. It isn't meant to be a tool to enrich the insured. Although insurance fraud by the policy issuer still occurs, the majority of cases have to do with the policyholder attempting to receive more money by exaggerating a claim. More sensational instances such as faking one's own death or killing someone for the insurance money are comparatively rare.

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  2. Mortgage Fraud

    Intentionally falsifying information on a mortgage loan application. ...
  3. Corporate Fraud

    Activities undertaken by an individual or company that are done ...
  4. Securities Fraud

    A type of serious white-collar crime in which a person or company, ...
  5. Life Insurance

    A protection against the loss of income that would result if ...
  6. Churning

    Excessive trading by a broker in a client's account largely to ...
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  1. Can your life insurance company sue you?

    A life insurance company generally cannot sue you, but it can sue your estate. The company may do this in order to recover ... Read Full Answer >>
  2. How do insurance companies use a whistleblower?

    Fraudulent claims are among the most prevalent and serious business risks that insurance companies face. Many consumers have ... Read Full Answer >>
  3. Does renters insurance cover personal injuries?

    Renters insurance provides two main forms of coverage – liability and contents insurance – and they are offered together ... Read Full Answer >>
  4. Does homeowners insurance cover vandalism?

    Vandalism is covered under an all-perils home insurance policy unless it is specifically excluded. Vandalism coverage applies ... Read Full Answer >>
  5. Does homeowners insurance cover tree damage?

    An all-perils homeowners insurance policy covers damage from trees in the event that it happens suddenly and by accident. ... Read Full Answer >>
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