Insurance Fraud Costs YOU!

Insurance fraud affects everyone. It's a silent thief that takes a toll on businesses of all sizes, impacts our loved ones, and directly depletes your own finances.

How does insurance fraud impact you?

The impact of insurance fraud is staggering, with its costs ultimately passed down to legitimate policyholders and consumers. When dishonest individuals or organized rings submit fake or exaggerated auto, home, or health claims, insurance companies often recover those losses by increasing premiums for everyone. This means that legitimate policyholders foot the bill through higher rates - paying more for essential coverage due to the fraudulent actions of others. Beyond these direct financial costs, insurance fraud erodes trust in institutions and makes transactions more complicated, ultimately harming the overall economy.

This is what it means for you:

• Higher insurance premiums: When insurers lose billions of dollars to fraud, from staged accidents to falsified claims and organized schemes, they pass those losses to customers in the form of higher premiums. This means your insurance coverage costs more to cover the criminals' gain.
• It steals from your essential services: Fraud against government programs like Medicare, Medicaid, or unemployment diverts taxpayer dollars away from critical services like education, infrastructure, and public safety. That's money that could be building better schools or repairing roads, but instead is lining a criminal's pockets.
• Scams make your policy a target: They cost you money, time, and stress required to clear your name and re-establish your legitimate coverage:
  • Policy & medical identity theft: A fraudster steals your personally identifiable information (PII) to file bogus claims against your existing policy, obtain prescriptions, or get medical services in your name. This leaves you with a fraudulent claims history that can raise your rates and make it harder to get future coverage.
  • AI-enhanced phishing & vishing (voice phishing): Scammers use highly realistic emails, texts, or even AI-cloned voices to impersonate your insurer or bank. Their goal is to trick you into revealing policy numbers, login credentials, or other sensitive data needed to take over your account or file a fraudulent claim on your behalf.
  • Post-disaster contractor fraud: Following a storm or loss, unsolicited contractors arrive and pressure you into signing an assignment of benefits (AOB) contract. This hands over control of your claim to the contractor, who then files an inflated or fraudulent claim with your insurer and may abandon the repair job entirely.
  • "Ghost brokering" scams (fake agents): A scammer poses as an insurance agent and sells you a policy with an unrealistically low premium. You pay the premium, but the scammer pockets the money and never actually binds the policy, leaving you completely uninsured when you have an accident.

What can you do? Be fraud aware!

Don't rely on everyone else to solve this growing problem. Each of us has a crucial role to play in protecting ourselves and our communities.

• Stay informed: Follow reputable sources for fraud prevention tips. Many organizations, including banks, government agencies, and consumer protection groups, offer free resources. Visit the Coalition Against Insurance Fraud for insurance fraud resources.
• Be skeptical: If an offer seems too good to be true, it probably is. If someone pressures you for immediate action or personal information, be wary.
• Protect your information: Guard your Social Security number, bank account details, and passwords. Use strong, unique passwords for online accounts and enable two-factor authentication whenever possible.
• Monitor your accounts: Regularly check your bank statements, credit card bills, and explanation of benefits (EOB) from your insurance company for any suspicious activity.
• Report it: If you suspect fraud, report it! Contact your bank, your insurance company, or the appropriate government agency (like the FTC, FBI, or your state's Attorney General's office). Your report can prevent others from becoming victims.

Fraud is a constant threat. It's important to become more aware, more vigilant, and more proactive, so we can all contribute to making our communities safer and more secure from the costly impact of deception.