Defrauding your auto insurance company may seem like an easy way to profit from an accident. Just a little white lie on your claim can mean a bigger payday for you. But any type of lie on your insurance claim is considered insurance fraud, an increasingly serious problem in the United States with serious consequences for criminals who try and get away with it.
What is Insurance Fraud?
Insurance fraud happens when people fake or over-exaggerate injuries or damage that takes place in the event of an accident. Insurance fraud also includes people who stage car thefts or who plan accidents in order to file a claim and get insurance money. Any false claim or act of trickery that leads to a claim is classified as insurance fraud.
What are the Different Types of Insurance Fraud?
Soft insurance fraud. Soft auto insurance fraud is a more minor offense than hard fraud. Soft fraud means being opportunistic, taking advantage of a situation which has already occurred. If, for example, a person was legitimately injured in a collision but pretended that the injuries received were worse and more painful than they actually were, and received additional monies because of it, that would be soft fraud. Soft fraud is the most common form of insurance fraud because it is very easy to commit and difficult to detect. Especially in cases where neck and back injuries are involved, it is often difficult to determine the true extent of the damage. Because of this, policy holders often exaggerate their pain or disabilities to receive extra compensation.
Hard insurance fraud. Hard insurance fraud is a much more serious offense than soft fraud. Hard fraud is deliberately causing an accident, staging a theft or otherwise intentionally setting up a situation where insurance money is at stake with the intent of receiving that money. This type of fraud is less common than soft insurance fraud, but has still cost insurance providers millions of dollars.
There are different laws in different states with regard to insurance fraud and penalties. Because of this, fines and criminal convictions vary depending on where you live. Penalties include a misdemeanor or felony charges and penalties can include fines or jail time.
The vast majority of auto insurance fraud convictions are criminal misdemeanors which result from soft fraud being committed. Soft fraud is exaggeration and is sometimes committed without malicious intent. It is classified as fraud and as a misdemeanor nonetheless because it involves lying to an insurance company about the state or nature of the injury or accident in order to receive a bigger payout.
When someone who commits insurance fraud is caught and convicted the result is generally a misdemeanor conviction and the consequences range from a fine, probation or loss of drivers license to jail time. Fines for misdemeanors don't exceed $15,000, but this amount can far exceed the amount a criminal attempts to defraud his insurance company for.
In recent years insurance companies have increased efforts to prosecute false insurance claims. Many companies now have special teams of insurance fraud investigators with backgrounds in law enforcement that can investigate and resolve fraud issues much faster than before. This process has lead to a significant decrease of payouts from fraud claims.
What is Insurance Fraud?
Insurance fraud happens when people fake or over-exaggerate injuries or damage that takes place in the event of an accident. Insurance fraud also includes people who stage car thefts or who plan accidents in order to file a claim and get insurance money. Any false claim or act of trickery that leads to a claim is classified as insurance fraud.
What are the Different Types of Insurance Fraud?
Soft insurance fraud. Soft auto insurance fraud is a more minor offense than hard fraud. Soft fraud means being opportunistic, taking advantage of a situation which has already occurred. If, for example, a person was legitimately injured in a collision but pretended that the injuries received were worse and more painful than they actually were, and received additional monies because of it, that would be soft fraud. Soft fraud is the most common form of insurance fraud because it is very easy to commit and difficult to detect. Especially in cases where neck and back injuries are involved, it is often difficult to determine the true extent of the damage. Because of this, policy holders often exaggerate their pain or disabilities to receive extra compensation.
Hard insurance fraud. Hard insurance fraud is a much more serious offense than soft fraud. Hard fraud is deliberately causing an accident, staging a theft or otherwise intentionally setting up a situation where insurance money is at stake with the intent of receiving that money. This type of fraud is less common than soft insurance fraud, but has still cost insurance providers millions of dollars.
There are different laws in different states with regard to insurance fraud and penalties. Because of this, fines and criminal convictions vary depending on where you live. Penalties include a misdemeanor or felony charges and penalties can include fines or jail time.
The vast majority of auto insurance fraud convictions are criminal misdemeanors which result from soft fraud being committed. Soft fraud is exaggeration and is sometimes committed without malicious intent. It is classified as fraud and as a misdemeanor nonetheless because it involves lying to an insurance company about the state or nature of the injury or accident in order to receive a bigger payout.
When someone who commits insurance fraud is caught and convicted the result is generally a misdemeanor conviction and the consequences range from a fine, probation or loss of drivers license to jail time. Fines for misdemeanors don't exceed $15,000, but this amount can far exceed the amount a criminal attempts to defraud his insurance company for.
In recent years insurance companies have increased efforts to prosecute false insurance claims. Many companies now have special teams of insurance fraud investigators with backgrounds in law enforcement that can investigate and resolve fraud issues much faster than before. This process has lead to a significant decrease of payouts from fraud claims.
About the Author:
About the Author - Leigh Jackson has been writing for the Texas auto insurance and business industry since 2010. Jackson specializes in tips and advice on online auto insurance and finding affordable auto insurance rates.
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