Insurance industries report a possible 3% to 10% of all insurance claims are frauds. There also are many reports of exaggeration, for instance if a thief has stolen a TV from someone, he will usually hide his computer and radio and add it too the report. The second ones usually are average people looking for a quick buck or have gone the bad road because of their current financial problems, such as bankruptcy or business failure. On the other hand we have usual criminal offenders and organized crime. Members are already having a police record and looking to benefit from insurance frauds on a regular basis. The money stolen by these fraudsters is the money from other people who are insured and those paying premium prices for extra security.
Auto Insurance Scam
Lets look at a professionally organized automobile insurance scam involving many con artists. You get up, dress for work and drive through your town to your workplace. Someone is following you, but you don't recognize it. At one time the car following will over take you and next hit the brakes making a rear-end collision. You won't even know whats going on and in panic maybe even forget the facts and events that happened before the car crash. The driver which you ran on to will immediately approach you, ask you what is wrong and if you need any help. "Is everything okay, do you need a doctor? If you want I can call my own. No? Lets examine the situation then. We should call a towing service and car body repair shop, I have one stored in my cell phone. We also should make proper legal arrangements, I will call my lawyer for us." Perfect! You think to yourself, hmm thats the best accident I've ever been too! What you don't know is that the Car Shop hired the driver to run onto you on purpose. The doctor and lawyer also were awaiting the call, being part of the game. In the end you or your insurance will pay the doctor, lawyer, towing fee, storage fee, car repair... If you are in a car accident, read the fine print on every paper you will sign. Don't accept offers for services from anyone involved in the collision.
Insured Documents Scam
Lets look at an example of fake insurance claims for travels. Even though nowadays travelling package at airports is highly automatized and computerized, there still are many reports on packages getting lost. Lugging baggage at airports is usually insured for a cost much less than the one paid if the package gets lost. Organized criminals therefor can and "loose" these to get money from an insurance company. More often at jobs like this there will be an insider person cooperating with the person who is about to "lose" their package. Same goes for insured papers and documents. During their transportation they somehow get lost during the way.
Fake Paper Claims
This is pretty simple. The con artist is trying to fool the insurance by making them believe an event that in reality never happened but only exists on the paper.
Fake Or Bogus Insurances
You are starting up a small business. As usual you have a low budget on start, but if you want to operate you have to get some insurances for your business or at least health care insurance for yourself and the employees. You ask around, look in newspapers, all across the internet to find a perfect deal. All of a sudden you find a special deal at a very low rate. You call the agent and sign the papers, happy you found this agent. Two months later one of your employees gets sick and you send him to your local hospital, but somehow he is denied to receive basic health care. You figure out you have signed a false insurance and gave the money to a thief.