Insurance fraud is one of the most significant factors driving legal system abuse in America. It is a complex issue that touches on everything from Medicaid to auto theft, increased insurance fraud can raise prices on consumers in what seems like every aspect of their lives.
This is why addressing the issue is so important.
To better understand the scope of insurance fraud, the Insurance Information Institute partnered with the Coalition Against Insurance Fraud, the International Association of Special Investigation Units, the American Property Casualty Insurance Association, and the National Insurance Crime Bureau on a study detailing the yearly impact of insurance fraud on the economy.
While in the past insurance fraud has costed the economy about $80 billion, this new assessment estimates the true cost at $308.6 billion. That staggering number includes categories such as life insurance ($74.7 billion), Medicare and Medicaid ($68.7 billion), and workers’ compensation ($34 billion).
Clearly, tackling a single category isn’t going to end the trouble.
Addressing insurance fraud will require a lot of effort from all stakeholders and will probably take many years to see significant results. But this is a challenge that the industry must meet if consumers are to continue having access to affordable, quality coverage.
What causes insurance fraud
The main motive in all insurance crimes is financial profit. Insurance contracts provide both the insured and the insurer with opportunities for exploitation. Another way for fraud to happen is over-insurance, in which someone insures property for more than its real value.
Its important to be honest, truthful and a good law biding citizen.
Contact Cosmo insurance today and get help with all your insurance needs.
