What is Insurance Fraud?

How Does it Impact You? 

According to Wikipedia, insurance fraud is any act committed with the intent to obtain a fraudulent outcome from an insurance process. This may occur when a claimant attempts to obtain some benefit or advantage to which they are not otherwise entitled, or when an insurer knowingly denies some benefit that is due.

Learn more about how this costly crime affects you by clicking on our digital brochure below!

Should Upstate be concerned?

The fact is that insurance fraud occurs everywhere in the state and takes many different forms: workers compensation fraud; owner give-ups in the auto theft arena, arson and fraudulent theft claims in the homeowners arena all cost many millions of dollars in fraudulent claims. That, in turn, increases insurance premiums for all New Yorkers.

Hear NYAAIF Board Member, John Sargent, being interviewed by Deb Gordon of 1010 WINS, New York City. 

What could you do with $80 billion each and every year?

  • Plant enough trees to reforest all of New England plus most of West Virginia.
  • Pay the healthcare costs for nearly 2 of every three seniors aged 65 and over for a year.
  • Buy a new car for nearly 3 million licensed drivers.

With 80 billion dollars...you’d be pretty busy wouldn’t you? Unfortunately, in the US, that amount of money goes up in flames every year because of insurance fraud. Insurance policy holders across New York State are victimized to the tune of more than half a million dollars a day. That’s money coming straight out of your pocket. And if you are a business owner, the daily cost to you is even higher.

Fraud is the crime you pay for! It claims many victims; families, businesses…anyone in New York. Don’t allow your business, your employees or your family to be victims. The fight against fraud begins with being able to identify it.

What is Insurance Fraud?

Insurance fraud is any act committed with the intent to fraudulently obtain payment from an insurer. It can be as simple as padding an insurance claim. Or lying about where you register your vehicle. Staged auto accidents are especially hurtful. Innocent victims can be injured or killed when crooks cause an accident in order to file fraudulent claims.

Other common forms of insurance fraud include:

  • Lying about your mileage to reduce your auto premiums

  • Filing false claims for medical treatment.

  • Workers Compensation insurance fraud is a form of fraud that is very costly to businesses throughout the state. There are many guilty parties here. Workers file false injury claims or continue to get insurance payments long after they have recovered. One way businesses commit the crime is by misclassifying workers. It’s hard to believe, but an estimated 50,000 construction workers in New York City alone are paid off the books as independent contractors in order to illegally save on worker’s compensation insurance premiums.

  • Corrupt doctors and lawyers get into the game by filing false claims themselves or recruiting others to file claims for many types of fictitious injuries. Some of their favorites are strained muscles, headaches, whiplash and stress. These types of claims are extremely difficult to disprove.

No matter who commits the crime, there are devastating consequences to businesses and all of us. Injured workers may be left high and dry without proper coverage and honest businesses are dealt a double blow of increased premiums and unfairly losing contracts to lower priced competition. In addition, businesses pay the price through production delays, retraining costs and equipment replacements. These costs weigh our economy down.

Another form of fraud is victimizing businessess through fake healthcare plans which can leave business owners and their employees without meaningful coverage and saddled with thousands of dollars in medical bills.

Insurance fraud has a tremendous impact on Medicare and Medicaid as well. Nationally, these two programs lose an estimated 60 billion dollars a year to insurance fraud!

Each and every one of us needs to take a zero tolerance attitude toward insurance fraud. Here are some actions you can take:

  1. You have the power to help. Educate yourself, and if you are an employer, educate your employees on how to spot insurance fraud and stop it. Here are some things to watch out for:

    1. Be cautious of attorneys or telephone callers who allege to be insurance representatives and immediately solicit your business for treatment at a medical facility following an accident.
    2. Check your doctor’s and attorney’s credentials. Before seeking medical treatment or legal counsel, contact the New York State board for medicine for information on physicians or the New York State Bar Association for information on attorneys.
    3. Be wary of referrals. Attorneys involved in medical mill operations will oftentimes insist an accident victim seek medical treatment from a specific doctor.
    4. Don’t be talked into an injury. Be cautious if your doctor prescribes excessive treatment for minor injuries. Seek a second medical opinion when, for example, your doctor recommends testing, x-rays and medication for your “severe back pain” when in reality you don’t feel any back pain at all.
    5. Talk to your insurance company. Maintain records of your office visits and treatments, and provide them to your claims representative, who can compare them to medical bills, uncover any discrepancies and avoid unnecessary payments to dishonest medical providers.
  2. Most important of all, don’t commit insurance fraud and if you see it happening, report it.

  3. And finally, pass our information along to everyone you know.

We live in a society that doesn’t tolerate theft. Insurance fraud is no different. Crime hurts our families, friends, neighbors and businesses here in New York and across the nation. Don’t put up with it anymore! It’s time to fight. Together, we can make a difference.

For more information, visit fraudny.com.