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Everything That You Have To Know About Insurance Fraud. Along with the invention of insurance was also the invention of insurance fraud. The fraud which is connected to insurance fraud comes in different types, which includes life insurance fraud and auto fraud. If you have an insurance, then this article is advisable for you to read since it will give you some insights about the effects of fraud to your insurance. Probably the main reason why people would commit fraud is for their own benefit of gaining money. There are definitely a lot of policies which can be filed against those people who commit fraud, thus, it is very easy for these people who commit frauds to be exploited. Commonly, insurance policies are exploited by individuals claiming more loss than actually occurred, or inflating the value of the item lost. Insurance fraud comes in two classifications which are known to be soft fraud and hard fraud. Among the two classifications of fraud, the common one is the soft fraud or can also be called as opportunistic fraud. This type of fraud occurs when an insured party inflates an already legitimate claim. Soft fraud may happen if an individual does not tell the truth, for example, an individual was involved in a car accident, then he will claim that his vehicle had more damage than it actually has. There are different thing that may happen if an individual who purchased a policy has misinterpreted the actual situation in order to get a lower premium, with this kind of situation, the soft fraud can happen at the start of a new insurance policy. Another example of this kind of fraud is those people who buy a car insurance policy, however, they do not tell the truth about the number of miles on the vehicle just so that they can get a lower premium.
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Hard fraud is when someone plans a loss to receive an insurance payout. This type of fraud is usually executed with a fire, “stolen” automobile, or similar that the individual plans themselves. Different forms of crimes were usually involved in hard fraud.
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Auto insurance fraud is one of the most common types of fraud. During 1996, it was known that approximately 36 percent of auto insurance claims were victims of fraudulent actions. There are different reasons why soft fraud may occur, and everything stated above are all parts of fraud, and also, those situations where an individual claims an accident that did not actually occurred, or if ever there is an individual who registered its automobile in a location which the insurance is less expensive. For example, a person who lived in an urban area will opt to register his car to a rural area in order to gain a lower premium.

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