Understanding Insurance Fraud

What is insurance fraud?

Insurance fraud is a serious crime that is punishable by law.  However, many people do not actually know what insurance fraud is or why it is so bad.  To ensure that you do not get involved in this illegal activity, here's what you need to know about insurance fraud.

What is Insurance Fraud?

In general terms, insurance fraud is lying to an insurance company in an attempt to receive compensation or undeserved benefits.  Insurance fraud can take different forms.  For instance, lying on your insurance application, exaggerating your damages during an insurance claim, or filing a fake claim are all instances of fraud.

Understanding the Different Types of Fraud

Legally, there are two main types of fraud: hard fraud and soft fraud.  A person committing hard fraud might fake an injury, theft, or accident and file a fake claim with their insurer in hopes of receiving compensation.  Soft fraud is like a smaller scale version of hard fraud.  A person committing soft fraud might have a legitimate insurance claim, but they exaggerate their damages in the hopes of receiving additional monetary compensation.

Consequences of Insurance Fraud

If you are caught committing insurance fraud, then the penalties can be very severe.  While soft fraud is considered a misdemeanor in many states, it is still punishable by fines, probation, community service, and even imprisonment.  Hard fraud is always considered a felony, and the perpetrator can be charged with over a year of jail time, major fines, and restitution payable to the insurance company.

This is what you need to know about insurance fraud.  Do you have further questions regarding your personal insurance?  If so, then contact the team at Scavone Insurance Agency Center LLC in White, Plains New York.  We are ready to assist you with all your coverage needs today.