Not every claim is honest. Insurance fraud is the intentional deception of an insurer to obtain benefits or advantages to which the perpetrator is not entitled. It ranges from exaggerated repair estimates to staged accidents and falsified applications.

Fraud increases costs for all policyholders through higher premiums. Insurers maintain special investigation units, share data through industry databases, and cooperate with law enforcement. Indicators such as inconsistent statements, prior claim patterns, and suspicious timing trigger deeper review.

Convictions can bring criminal penalties as well as civil recovery. Prevention includes verification of applications, careful claims investigation, and public awareness that fraud is not a victimless crime. The line between aggressive claiming and fraud is defined by intent and material falsehood.

• Intentional deception to obtain insurance benefits
• Includes claim and application fraud
• Raises costs for honest policyholders
• Fought through investigation and prosecution