It may seem from the outside that
the insurance company is always the victim in an insurance fraud; but the
reality is somewhat different. According to the Coalition against Insurance
Fraud, on average, every American family pays as much more than $1000p.a in the
form of increased premium costs to cover the losses of insurance frauds.
Furthermore, the additional cost that businesses bear in insurance is the added
expenditure that’s passed onto the consumers in the form of inflated prices.
Consequently, the cost of fraudulent claims is being indirectly passed onto the
end user as higher premiums and increased value of goods.
However, the big question that
arises is, ‘what exactly is insurance
fraud?’ Is it the criminals that plot against insurance companies to
extract millions of dollars or an ordinary citizen that lies just in order to
obtain some extra in insurance claims than what they really ought to have? The answer is a blend of both!
To clearly identify the victims
in an insurance fraud, it’s imperative to have a basic idea of types of
insurance frauds. Typically, there are two kinds of frauds: Hard Fraud and Soft
Fraud.
Hard Fraud
Typically, a hard fraud is
conducted by an individual or a team of individuals that intentionally set out
their motive to fraudulently grab money from an insurance company. The schemes
that they plot can be categorized as orchestrated auto accidents, fake medical
bills and even murder.
Soft Fraud
On the other hand, soft fraud is
when a sincere and normal person decides to deceive the insurance company just
to reduce his/her premium costs or inflate the settlement of its claim. Simple
and basic lies such as veiling a speed ticket to suppress insurance costs falls
under the category of soft fraud. In other cases, soft fraud is also when a
person unreasonably exaggerates a claim just to earn more money from it.
It
is important to understand that the purpose of developing insurance was to
compensate or reimburse people; not multiply their wealth just because they
were a part of the loss. It is surprising to know that many people think and
believe that soft fraud is not a crime and that it’s justified. They commit
soft fraud by presuming that the insurance company is raking millions of
dollars by manipulating the general public. So, to get their fair share of the
pie, they shamelessly commit soft frauds.
Fortunately or unfortunately,
this inference is totally flawed. People must understand that the cost of these
fraudulent claims is further passed onto the end-user in the form of higher
premium costs. Hence, the real sufferer of an insurance fraud is the end user.
If you’re seeking justice for insurance frauds, then head to National SIU, leading private investigation firm that houses the best insurance fraud specialists to offer customers with the finest results in a timely manner. Visit their website http://www.nsiu.com/ for more information.
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