What is fraud and why is it such a popular crime among money-hungry crooks?  Fraud occurs when insurers and agents defraud consumers or when individuals deceive an agent or insurance company in order to collect money to which they are not entitled. 

Insurance fraud has lots of lasting effects on innocent consumers and are almost too numerous to mention.  For example, those who stage automobile accidents in order to collect insurance money risk killing or seriously injuring innocent bystanders.  Those who sell bogus health insurance are risking the health of unknowing consumers, especially the elderly, who are often targets of such schemes. 

Often, families or individuals lose their life savings in insurance investment scams.  Premiums rise or remain high because insurance companies must pass the cost of fraud to their customers and honest businesses lose money due to rising costs caused by ongoing fraudulent behavior.

Experts note that insurance fraud persists because insurance companies are too quick to pay on frivolous or suspicious claims, choosing that option over potentially costly lawsuits and court appearances.

Criminals view insurance fraud as a low-risk crime, much less risky than committing armed robbery or selling drugs or other illegal substances.  Some states don’t even possess specific laws to address these crimes and, in the states where insurance crooks have been prosecuted, the jail time has historically been rather light.

It’s easy to target the elderly and immigrants in such fraudulent schemes.  These vulnerable individuals most often fall prey to these con-artists, who play on the frailty of older folks and the language difficulties that immigrants may face.

Counteracting insurance fraud is a never-ending job, but states are continuing to create fraud boards and watchdog organizations persist in rallying for tougher laws and punishment for offenders.