1. What the heck is an insurance policy scam anyway?

When somebody acquires benefits which they are not qualified for after purposely deluding 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 an individual pretends to have lost an item. To increase the opportunities of profiting from an insurance claim, a person can decide not tell the truth on some of the facts presented.

2. Is it truly necessary to be troubled by scams in insurance?

Yes we should be worried. We will all pay expensive premiums if insurance organisations lose cash to deceitful actions. Premiums are more expensive if the risk of losing money through fraudulent activities is high.

Commercial enterprises will pay increased commercial and health insurance costs because premiums are expensive. Consumers are faced with price increases on services and consumer commodities because companies pass on the high insurance prices. Now, we are all obliquely losing cash to fraudulent activities because commercial enterprises are right away losing thousands of dollars.

Cash is invested in financial establishments like banks by insurance businesses. Less money will be disposable for investment, resulting in diminished economic activity to a particular degree, if insurance institutions lose cash.

When fraudsters stage factitious accidents or sell factitious health insurances, they will endanger people’s lives and health. By trying to produce a deceitful accident, innocent individuals could be injured or even die. Similarly, intentional burning may end up in the death of a someone or pets. A deceiver could seek to gain from life insurance money by murdering people or killing animals.

3. Why are we failing to prevent these scams?

We can consider different cases. Insurance fraudulent activities are reckoned as small risk criminal acts because at times it is very problematic to detect if it is done only once by the defrauder. Repeated traits of criminal behaviour enable fraudulent activities to be noticed, since a comparison can be made with historical records.

Compared to crimes related to alcoholic abuse and drug-related substances, it is interesting to recognize that a small importance is given to fraud by law enforcement agencies. Prosecuting Officers give small legal priority to insurance crimes because they consider them to be intricate for successful prosecution. For example, the complex billing systems, found in some countries, are vulnerable to con artists who can easily siphon money through misleading claims.

At times it is reckoned to be a waste of time to fight small misleading claims by the insurance business enterprises. If the amounts of cash involved are large the insurance business enterprises tend to take notice.

In order to prevent fraud ensuring that everybody is cognisant of it is the first thing we need to do. The ability to discover actions of fraud is another essential point. Thirdly, notifying fraudulent activities to the relevant authorities must be applauded.