1. Are you knowledgeable of what an insurance scam is?

When somebody acquires benefits which they are not entitled to after intentionally betraying an insurance company then he or she has precisely made a scam. A great example of a scam is when a unreal accident is reported or a person pretends to have lost an item. Another good example is when someone tells a lie as means to increase the opportunities of receiving an insurance compensation.

2. Should we get troubled by insurance fraud?

Yes we must be concerned. The more funds lost to fraudsters by insurance organisations the higher the premiums every person will pay. The greater the risk of fraudulent activities the more the money we will pay in our premiums.

Business enterprises will pay high commercial and health insurance premiums because premiums are expensive. Consumers are faced with price increments on services and consumer commodities because business organisations pass on the higher insurance prices. By losing tens of millions of dollars annually to fraudsters in an indirect manor, every consumer is also losing funds indirectly.

We know that some of the investments in financial business enterprises like banks comes from insurance business enterprises. So when the insurance businesses lose funds there will be less funds for investments, and this then contributes to a general decay of economic activity to some extend.

The life and health of individuals will be in danger when insurance fraudsters sell fake insurances or stage factitious accidents. Producing a factitious accident can result in people sustaining injuries or worse being killed. Another example is individuals or animals can be killed if an individuals falsifies an accidental fire. A con artist may seek to benefit from life insurance money by murdering people or killing animals.

3. Since we recognize that insurance fraud is real why are we not eradicating it?

We can look at several cases. It is difficult to detect fraudulent activities in insurance because it sometimes happen only once or a few times and is therefore considered low risk criminal activity. Some cases of fraudulent activities are discovered if the perpetrator repeats the same crime or if the deceptive activity is similar to other recorded insurance fraud crimes.

Interestingly enough fraudulent activities are given a reduced importance by the law enforcement agents when compared to crimes related to drugs and assault. The complexity of insurance fraudulent activities crimes implies that they are challenging to prosecute and therefore are given a lesser importance.For example, the complex billing systems, found in some countries, are open to con artists who can easily siphon money through deceptive claims.

Rather than battling small misleading claims in courts of law, insurance firms sometimes prefer to pay off the fraudsters. If the amounts of money involved are huge the insurance business enterprises tend to pay attention.

In order to forbid fraudulent activities ensuring that everybody is mindful of it is the first thing we need to do. The capacity to find activities of fraud is another vital point. Thirdly, communicating fraudulent activities to the appropriate government agencies must be urged.