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What is Insurance Fraud?

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What is Insurance Fraud?weight scales in law

What is Insurance Fraud?

What You Should Know About Insurance Fraud


Most people assume a little white lie is harmless. When you’re filling out an insurance application, have you ever been tempted to lower your annual mileage? Or conveniently forget to disclose that you have a pool in the backyard? Even when you file a claim, you might include damage to your fender that you know happened long before the accident. All of these “harmless” lies can cause some serious damage when the truth comes out. If you are convicted of committing insurance fraud, you could face huge fines and even spend time behind bars. It’s important to understand what it is and how you can avoid it.


What is insurance fraud?

The most basic definition of insurance fraud is deceiving an insurance company in order to receive compensation or other undeserved benefits. The could be a white lie in an application form, an exaggerated claim for damages, or even a blatant lie about a claim. In most cases, people commit insurance fraud to save money or receive an insurance payout. Although it seems harmless to cheat the system, it could land you a felony conviction and time in prison.


How to avoid it?

To avoid insurance fraud, it’s important to be honest with your insurer. Don’t alter the truth on application and claim forms, even if that means you now face a slightly higher premium or a lower payout. It is a small price to pay to stay legal. What’s more, it’s important that you review your insurance policies often. If your situation changes and your insurance policy is not updated, you could be left without coverage when hoping to file a claim. Review coverage with your insurance agent at least annually or as often as needed when your lifestyle, habits, and financial picture change.


Work with professionals who have your best interest in mind. Contact the team at Little & Sons Insurance Services to get started on your tailored policy today!


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