How to Detect Insurance Fraud
Insurance fraud constitutes making fraudulent claims to the insurance company and could easily fall under felony charges. This includes auto insurance, health insurance, property insurance, and any other insurance type. Unfortunately, not everyone accused of insurance fraud is guilty of the allegations. Some are innocent and were charged because of a mistake in the form or a simple misunderstanding. Below is more information about insurance fraud:
An overview of insurance fraud
Insurance fraud occurs when an individual makes false statements to the insurance company intending to deceive the company or obtain an improper financial benefit. For example, a person who overestimates the amount of damage they are entitled to receive when making a claim for a damaged car will be found guilty of insurance fraud.
Insurance companies can also be guilty of insurance fraud if they intentionally deny paying benefits when the insured party should be rightly compensated for damages. Overall, insurance law prohibits making false statements in an insurance application seeking to obtain a payment to cover a loss. Intentional acts such as setting fire on stores to receive compensation also constitute fraud punishable by the law.
Detecting insurance fraud
Insurance fraud is a significant problem affecting the nation’s economy. Insurers seek to recover money lost when defrauded bypassing the loss to customers by charging higher premiums. Because of the high rate of insurance fraud, companies use statistical analysis tools and computers to detect suspicious claims before investigating further to establish insurance fraud. The tools compare data of actual claims to the expected claims.
Suppose the statistical tools detect a higher claim than the expected value. In that case, insurance companies investigate further and seek to find out whether the insured party exaggerated the value to profit from the claim. Established insurance fraud cases are prosecuted as criminal cases with severe consequences.
Prosecuting in insurance fraud cases
There are two general types of insurance fraud. Soft fraud is one where the accused made a misleading statement or omitted some material to benefit financially. Penalty for this kind of fraud is fines, jail time, probation, and community services.
On the other hand, hard fraud is an intentional fabrication of a loss to obtain payments for financial gain. Examples of hard fraud cases include arson and staging car accidents. Offenders face a possibility of one year in jail or a substantial fine. The prosecution must prove the following beyond reasonable doubt:
- The accused knowingly made a misleading statement
- The misleading statement had a connection with the claim or payment
- The statement has an impact on the outcome of the claim
Working with a defense attorney
It is possible to commit insurance fraud because of a misunderstanding or a mistake when filing the claim. If accused, you need to work with a defense attorney to protect your rights, minimize the charges, or have the charges dismissed. If you are looking for a Bayonne Personal Injury Attorney to protect your rights and avoid wrongful prosecution in an insurance fraud lawsuit, contact the Law Offices of Anthony Carbone by calling 201-733-2230.