Insurance Cons – How Fraud is Costing All of Us

1. What is an insurance con?

An insurance scam is made when benefits are received from an insurance company after staging dishonest information. A typical example of a scam is when a fraudulent accident is reported or a person pretends to have lost an item. Another example is when someone tells a “white lie” as means to improve the opportunities of getting an insurance compensation.

2. Is it actually essential to concerned with scams in insurance?

There are countless reasons why you could be troubled.We will all pay expensive premiums if insurance business enterprises lose money to dishonest activities.This therefore means that when the risk of fraudulent activities is high we will end up paying expensive insurance premiums.

Companies will pay high commercial and health insurance costs because premiums are expensive.Consumer commodities and services are traded at high prices because the high insurance costs are handed on to the customer. Now, we are all obliquely losing money to fraudulent activities because businesses are primarily losing thousands of dollars.

We acknowledge that some of the investments in financial businesses like banks comes from insurance business organisations. To certain extend, there is a general decline in economic activity when essential institutions similar to insurance institutions lose funds, because less cash will be available for investment.

The life and health of individuals will be in peril when insurance fraudsters sell factitious insurances or stage factitious accidents.. Producing a unreal accident can result in people suffering injuries or worse being killed. Similarly,intentional burning may lead to the death of a person or pets. A defrauder could seek to benefit from life insurance money by murdering people or killing animals.

3. Since we recognize that insurance fraudulent activities are real why are we not eliminating it?

Various reasons can be recognized. It is difficult to find fraudulent activities in insurance because it at times take place only once or a few times and is therefore interpreted small risk criminal activity. Repeated blueprints of criminal behaviour enable fraudulent activities to be detected, since a comparison can be made with historical criminal records.

Interestingly enough fraud is given a reduced importance by the law enforcement agents when compared to crimes related to drugs and assault. Insurance crimes are considered to be too intricate to be successfully prosecuted, and this has resulted in them being given a low legal precedence by prosecuting officers. It is a known fact that fraudsters can profit from obscure situations since they can exploit failings within the systems.

Sometimes it is interpreted to be a waste of time to battle small deceitful claims by the insurance businesses. If the amounts of funds involved are huge the insurance commercial enterprises tend to acknowledge.

Now, the first thing to prevent fraudulent activities is to make specific that the public is conscious of it. Secondly, being able to find out misleading activities is also essential. Applauding individuals to contact law enforcement agencies is vital.

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