Insurance agencies take their financial and business interests seriously. So much so that they devote a lot of time and resources to investigating claims before making compensation.
Unfortunately, insurance fraud remains one of the major challenges insurance companies face. It is not uncommon for claimants to commit insurance fraud as a way to make easy money. In fact, the FBI reports that insurance fraud costs American households approximately $40 billion per year.
So what exactly is insurance fraud, and how does it happen?
As the name suggests, insurance fraud is a form of white-collar crime that happens when a claimant intentionally falsifies a claim for their own financial gain.
Like with most white-collar crimes, the prosecution has to attain the highest level of proof to secure a conviction. This is because there is more to fraud than simply giving false information.
Here are two elements of insurance fraud that must be established beyond reasonable doubt while litigating an insurance fraud case.
The claimant intentionally made falsified a falsified claim
For insurance fraud to happen, the claim must not only be inaccurate. Rather, the perpetrator must have known that their claim was indeed false, and they must have intended to make such a claim with the goal of unlawfully benefiting.
The false claim was material
For a statement to be material, it must be crucial and relevant to the claim in question. This means that if the claimant knowingly gives a falsified statement, they may not be guilty of insurance fraud unless the statement had a direct connection to the claim they are pursuing and can impact the outcome of their claim.
Insurance fraud costs insurance companies billions of dollars every year. Find out how you can protect your business interest while litigating insurance fraud.