Is Insurance Fraud a Crime? Not Everyone Thinks So

  Wednesday, June 7th, 2023 Source:

A significant number of Americans aged 45 and younger show a high level of tolerance for insurance fraud – even feeling envious of those who commit it – according to a new survey of insurance consumers by Verisk and the Coalition Against Insurance Fraud.

The study analyzes how American consumers view insurance fraud and insurance crime and delves into the psychology of insurance fraud to understand the motivations and justification for the crime derived from in-depth interviews with those convicted of insurance fraud.

‘This study should sound the alarm for insurers, consumer activists, regulators, and legislators on the state of fraud in America. While it’s marginally reassuring that 84% of Americans in the survey consider insurance fraud a crime, the 16% that do not consider it a crime potentially represent more than 53 million Americans,’ said Matthew Smith, executive director of the Coalition Against Insurance Fraud. ‘There is a need for consumer education on the harm insurance fraud crimes have on our economy and on every American citizen and family.’

The study found that 87-96% of older respondents consider insurance fraud a crime, while only 75% of those under age 45 consider it a crime, with the percentage skewing downward by age to only 64% for the youngest group.

Other findings include:

More than 36% of all Americans believe it’s acceptable to submit an inflated auto damage claim
Over 30% of 25-34-year-olds ‘definitely would’ submit a fraudulent property damage claim
27% of those 18-24 would commit workers’ compensation fraud, compared to less than 10% of those 45 and older
Over a quarter of those 18-34 are ‘motivated’ to commit insurance fraud compared to less than 7% of those over 45
‘The results prove the continued need for insurers to be hypervigilant about the impact of fraud on their book of business,’ said Maroun Mourad, president of Verisk Claims Solutions. ‘The fact that younger generations are more tolerant and motivated to commit claims fraud indicates that this problem is not going away and is likely to persist in the future. Carriers would be wise to set up a strong perimeter defense to ensure they are adequately and accurately detecting potential fraud throughout the policy life cycle.’ The study, conducted by Dynata, collected more than 1,500 responses from a group of insurance-purchasing consumers matching the demographic standards identified in the 2020 U.S. Census.

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