What is the definition of Fraud?

Fraud refers to the act of intentionally concealing or lying.

For the insurance industry, this can refer to receiving claims payment for something that should otherwise not be paid had the insurance company known the actual situation. On the part of the insurance company, it can mean misrepresentation or lying done by the company's agents and brokers, or employees and managers, all for the sake of financial gain.

Insurance claims fraud negatively impacts all clients, since the large losses due to fraudulent claims affect the company's profits, and subsequently the premiums offered to clients.

To prevent losses due to fraud, some large or potentially fraudulent claims are assigned to a claims adjuster or insurance professional who will review the claims. If the claims are discovered to be fraudulent, the insurance company will deny payment of the claim.

• Insolvency
• Misstatement of Age or Sex Provision
• Modified Premium Policies
• Moral Hazard
• Comprehensive Coverage