Insurance is an industry based on the distribution of risk. You insure a piece of property, say your car, for a premium payment of $600 a year. If you suffer a loss of the use of that property due to an accident, your insurance company will make you whole, minus any deductible, of course. Due to the nature of the business, the opportunities for fraud are legion.
- Agent and Underwriting Fraud -- Agents have endless opportunities to defraud not just the customer, but also the insurer.
- Vehicle Insurance Schemes -- Lots of variety here: inflated damages, staged accidents, ditching, and the old Swoop & Squat scheme are but a few.
- Property & Casualty Scams -- Property that never existed, losses that are overstated, and "slip and falls" are hallmarks of these all-too-common frauds.
- Life Insurance Fraud -- Murder for profit sounds movie script-ish, but it's done. Can a stranger insure your life? Not legally, but it's done all the time.
- Workers' Compensation Fraud -- Although only a small fraction of Workers' Compensation claims are fraudulent, the cases that do occur are expensive.