1. Are you familiar with what an insurance scam is?
An insurance con is produced when benefits are received from an insurance company after presenting wrong information. A typical example of a scam is when a wrong accident is reported or a person pretends to have lost an item. If for example an accident has honestly taken place, scammer could exaggerate or twist around some of the facts in order to escalate the prospects of acquiring the claim.
2. Do we genuinely need to be troubled by fraudulent activities?
Of course we can be worried.We will all pay high premiums if insurance business enterprises lose cash to deceptive activities.This therefore means that when the chance of fraudulent activities is high we will end up paying costly insurance premiums.
Commercial enterprises will pay higher commercial and health insurance prices because premiums are costly.Consumers are faced with price increases on services and consumer commodities because companies pass on the very high insurance prices. What this means is that business organisations are directly losing tens of millions of dollars annually to fraudulent activities and we are all in some manner diffusely losing funds too.
Now, another issue is that insurance businesses invest their funds in financial establishments such as the banks.So when the insurance companies lose money there will be less funds for investments, and this then contributes to a general decline of economic activity to some extend.
When fraudsters stage unreal accidents or sell fake health insurances, they will endanger people’s lives and health. Innocent persons can be injured or at times killed when people try to stage a misleading accident. Another example is individuals or animals can be die if an individuals falsifies an accidental fire. Killing individuals or killing animals for life insurance funds is another way fraudulent activities may occur.
3. So if we are all affected why is it problematic to forbid this insurance scourge?
Various reasons can be identified. It is difficult to determine fraudulent activities in insurance since it at times occur only once or a few times and is therefore reckoned low risk criminal activity. Repeated blueprints of criminal behaviour enable fraud to be discovered, since a comparison can be made with historical track records.
Interestingly enough fraudulent activities are given a reduced priority by the law enforcement agents when compared to crimes related to drugs and terrorism. Insurance crimes are reckoned to be too complex to be successfully prosecuted, and this has resulted in them being given a low legal priority by prosecuting attorneys.For example, the complex billing systems, found in some countries, are vulnerable to con artists who can easily siphon funds through deceitful claims.
Rather than challenging small deceitful claims in courtyards, insurance firms at times prefer to pay off the fraudsters. Insurance business organisations tend to get serious when large amounts are included.
Making everyone knowledgeable of fraudulent activities is the first vital step. The second point is the capacity to detect deceitful activity. Thirdly, disclosing fraud to the appropriate authorities must be applauded.