Younger Adults More Likely to Commit Insurance Fraud, Study Finds

A new study published in the Journal of Consumer Affairs reveals that younger adults—particularly those under age 34—are more likely to commit insurance fraud, sometimes unknowingly. Using survey data from 1,491 U.S. adults, researchers Brenda J. Cude and Hanchun Zhang found that younger respondents were significantly more likely to engage in behaviors like padding claims or misrepresenting information to insurers. About 39% of Millennials admitted to using deceptive tactics to lower auto premiums, compared to just 3% of Baby Boomers.

The research suggests that age is a key predictor of fraud tolerance, with younger adults more influenced by peer acceptance and less swayed by the legal consequences of fraud. Surprisingly, even those with relatively favorable views of insurance companies were more likely to commit fraud—raising questions about how consumers understand ethical and legal boundaries.

Another major finding: many people, especially younger respondents, may not recognize certain actions—like listing a different garaging address—as fraud. This ‘gray area’ of fraud tolerance often stems from poor insurance literacy and a perceived disconnect from insurers, which are often viewed impersonally as faceless corporations.

To combat this trend, the authors call for targeted consumer education that clarifies what constitutes insurance fraud, its long-term effects on premiums, and the role of ethics in claim practices. They suggest that better understanding, not just more rules, may reduce fraud among younger policyholders.