Insurance Fraud — Anything But A Victimless Crime

It always amazes us to learn that a substantial percentage of Americans believe its okay to rip off their insurance company. Perhaps these are the same folks who think its “expected” to stroll from movie to movie in a multiplex on a single ticket, or sign up for free giveaways like T-shirts or bobblehead dolls at the ballpark in return for a new credit card, knowing they will cancel the card when it arrives in the mail.

In any case, insurance fraud is seen as a minor transgression–and its probably added into the cost of policies anyway, people rationalize.

The cost might be built in all right, but the result is higher premiums for everyone. Its time for the industry to really hammer that message home.

In the latest surveys, the Insurance Research Council found that 33% believe it is “all right” to exaggerate insurance claims to make up for a deductible. In addition, 22% said it is acceptable to boost a claim to make up for premiums paid when no claims were made.

The only good news is that the percentage of those who accept the padding of claims has been falling steadily, but only slightly. The amount of casual fraud remains too high.

Insurers need to keep reminding policyholders that boosting claims beyond what is owed is a crime–and not a victimless one. People need to be told that their neighbors casual greed raises the premiums of honest policyholders.


Reproduced from National Underwriter Life & Health/Financial Services Edition, August 25, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.