Insurance Fraud

Definition

• An illegal act done with the intent to gain insurance benefits or other advantages through fraud, or for an insurer to deny a legitimate claim. Insurance fraud is estimated to be a multi-billion dollar industry, and it affects all classes of insurance from "hard fraud" including arson, auto theft, life insurance fraud, medical insurance fraud, or "soft fraud" resulting from a policyholder exaggerating the damages in a legitimate claim.

Synonyms
fraud, defrauding insurance companies

Related Terms and Acronyms

• Clean Sheeting — Definition,
  • A type of insurance fraud where an individual deliberately fails to disclose a pre-existing condition in order to receive coverage, sometimes with the help of an insurance broker.
• Collusion — Definition,
  • A secret, deceitful agreement by two or more parties to defraud others.
• Concealment — Definition,
  • The act of lying or omitting information when applying for insurance coverage.
• Exclusions — Definition,
  • Situations, as listed in an insurance policy, where insurance companies are allowed to deny coverage to policyholders.
• Fake Claim — Definition,
  • An insurance claim made fraudulently.
• Fidelity Bond — Definition,
  • Insurance that protects a business from losses due to employee fraud, such as theft, forgery or fraudulent trading.
• Insurance (insur) — Abbreviation,
  • An arrangement where one party provides financial protection to another party for specific damages or losses.
• Insurance Claim — Definition,
  • An application for benefits made by an insurance policyholder after an insured event.
• Mis-selling — Definition,
  • The act of misleading a client into buying a product or service by deliberately misrepresenting the aforementioned product or service.
• Money Laundering (ML) — Acronym,
  • A process used by individuals to conceal illegally acquired funds by converting them into seemingly legitimate income. The term is generally associated with organized crime and those who need to legitimize illegally earned funds.
• Pre-existing Condition (PRE-X) — Acronym,
  • A medical condition that's occurrence precedes the writing of an insurance policy.
• Tort — Definition,
  • An act that causes harm or loss.
• Unauthorized Insurance — Definition,
  • A fraud where a scammer sells a victim an insurance policy that doesn't exist.
• Unfair Claims Practice — Definition,
  • The act of an insurance company avoiding or reducing valid insurance claims.