1. What the heck is an insurance scam anyway?

An insurance policy scam is produced when benefits are got from an insurance company after exhibiting fake information. A great example is when an individual misrepresents an accident or loss of property to collect cash illegally form an insurance company. Another example is when someone tells a lie as way to escalate the chances of receiving an insurance compensation.

2. Do we genuinely need to concerned with fraudulent activities?

Of course we can be concerned.The first cause is that the more such money the insurance business organisations lose to fraudsters the expensive the premiums you have to pay for your insurance policy.Premiums are more costly if the risk of losing cash through fraudulent activities is high.

Health and commercial insurance prices escalate as premiums become more expensive.Consumers are faced with price increments on services and consumer commodities because business enterprises pass on the higher insurance prices. Now, we are all obliquely losing funds to fraud because companies are right away losing thousands of dollars.

Now, another matter is that insurance businesses invest their cash in financial organisations such as the banks.So when the insurance businesses lose money there will be less funds for investments, and this then leads to a general fall of economic activity to some extend.

Selling health insurance policies and faking accidents by fraudulent individuals is one of the examples which can create grave circumstances. Innocent persons could be injured or at times killed when people try to arrange a fraudulent accident. Another example is people or animals can be die if an individuals misrepresents an accidental fire.Murdering people or killing pets for life insurance money is another way fraudulent activities may take place.

3. So if we are all affected why is it problematic to forbid this insurance scourge?

Various reasons can be identified. Insurance fraud activities are considered as small risk criminal acts because in some instances it is very challenging to detect if it is done only once by the defrauder. Some examples of fraud are noticed if the perpetrator repeats the same crime or if the deceptive activity is similar to other recorded insurance fraud crimes.

Compared to crimes related to alcoholic drink and drugs, it is interesting to recognize that a small priority is given to fraud by law enforcement agencies. Insurance crimes are reckoned to be too intricate to be successfully prosecuted, and this has resulted in them being given a low legal importance by prosecutors.For example, the complicated billing systems, found in some countries, are open to con artists who can easily siphon money through dishonest claims.

In some cases insurance firms could find it cost efficient to pay off small fraudulent claims instead of battling it out in the courtrooms. Insurance businesses tend to get tough when large amounts are implied.

Now, the initial issue to thwart fraudulent activities is to make sure that everyone is cognisant of it. Secondly, being able to find out deceptive actions is also vital. Thirdly, disclosing fraudulent activities to the appropriate law-enforcement agencies must be persuaded.