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Summer 2021  Volume 14, Number 2        
 

Why It Pays to Report Insurance Fraud

Fraud costs the insurance industry more than $40 billion annually, according to the Federal Bureau of Investigation (FBI). To cover these losses, insurance companies pass costs along to consumers.

The FBI estimates that the annual average increase in rates due to fraud is $400 to $700 per family.

Popular Scams

The main types of fraud are either committed by consumers or agents. Here are examples:

By Consumers

  • Listing an incorrect residence address to obtain cheaper insurance
  • Inflating medical bills
  • Falsely claiming a medical disability
  • Questionable death or disability life insurance claims
  • Stealing or falsifying identity information to obtain a policy
  • Stealing or falsifying payment information used to secure a policy

By Agents

  • An insurance agent fails to send premiums to the underwriter and keeps the money.
  • Selling insurance without a license, collecting premiums and then not paying claims.
  • Theft of insurance company assets during an acquisition or merger.

How to Report

Once you suspect a problem, gather as much information as possible. The more information you can provide in the form of relevant documents, names and dates, etc., the more likely agencies will take your report seriously.

If you are the victim, call your insurance company first. Most insurance companies have departments which investigate reports of fraud or errors. If you aren't the victim, you can still make a report to the insurance company.

Organizations dedicated to combating fraud include:

  • Local law enforcement agencies.
  • Federal Bureau of Investigation's local field office.
  • National Insurance Crime Bureau at www.nicb.org or (800) 835-6422.
  • Your state's insurance fraud bureau.
  • U.S. Department of Health and Human Services Office of Inspector General for Medicare fraud cases at https://tips.oig.hhs.gov or (800) 447-8477; or to the Center for Medicare and Medicaid Services at (800) 633-4227. Substantiated reporting of Medicare fraud may earn you a $1,000 reward.
  • National Association of Insurance Commissioners (NAIC) at www.nicb.org.

 

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In this issue:

This Just In...

Should You Use Your Credit Card to Pay Your Medical Insurance Premiums?

Think You’re Too Old for Life Insurance? Think Again!

Take Control of Prescription Costs

Why It Pays to Report Insurance Fraud

 


The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher’s permission. All rights reserved. ©2021 The Insurance 411. www.theinsurance411.com Tel. 877-762-7877.