The majority of people who commit insurance fraud don’t think they’re hurting anybody directly. In fact, they think they’re hurting major corporations who have enough money that they don’t care anyway. This is not the case. In the United States, insurance scams cost an estimated $875 per person annually. It adds up to approx. $80 billion per year, and with the rapid growth of technology, it’s getting harder and harder to catch.
There are different types of insurance fraud.
One of the leading forms of insurance fraud is in our health care system. Health care fraud results in over $30 billion per year in the United States. There are two kinds of health insurance fraud: member fraud and provider fraud. An example of member fraud is when you deceive your insurance company by purposely not declaring something, where an example of provider fraud is if you were to bill for a service that was never rendered.
One fast-gorwing form of insurance fraud is automobile insurance fraud. Staged rear-end car accidents are a common form of this type of fraud. This is when a scam driver will stop suddenly in front of a car deliberately so they other car rear-ends them. Another popular scam is when there’s already an accident, you add damage purposely in the hopes to collect more money. Often times, this works, which is why it’s important to take photographs of the damage.
Another form of insurance fraud is when the beneficiary tries to collect the benefits while the insured is still alive. This is called life insurance fraud. The best thing you can do in this scenario is to know your insurance broker. When you go in to pay your premium on the insurance, don’t pay in cash. make sure you understand your policy, and if you don’t, bring it to someone who does.
And last but not least, I want to talk about fire insurance fraud. This form of fraud is very common because it’s hard to prove. If you lose your house to a fire, who’s stopping you from declaring stuff you didn’t have in the first place? There is no real way to prevent this kind of fraud. This will haunt you in your taxes and that’s about it. The best thing you can do is report it if you hear of anyone making false claims.
As I mentioned previously, the best thing you can do if you’re a victim of fraud or if you hear of any sort of fraud taking place, is to report it. You can report fraud to the National Fraud Information Center at 1-800-876-7060. I hope this article has opened everyone’s eyes a little bit to how this serious crime is affecting each and every one of us.
Posts Tagged ‘ Fire Insurance ’
Insurance. What would we do without it? Though it seems impossible, there was a time when insurance on anything didn’t even exist. Unfortunately, the early beginnings of insurance are unclear. Over the centuries there have been key writings uncovered that give us some ideas of it’s beginning s. But as to an actual moment in time when the first item was insured, no one really knows.
There are theories that insurance goes back to the early days of the Babylonian traders at around the 2nd millennium BCE. They created a system which was recorded in the famous Code of Hammurabi around 1750 BC. This system was practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment he would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen.
As a business itself, the first recognizable form of insurance started in Great Britain in 1666. This was in reaction to the “Great Fire Of London.” Because of this incident fire became a growing concern in England. Another major concern in England during the time was marine insurance because of England’s position in the world of sea trade. Some of the early insurance companies of the time were The Sun Fire Office, Royal Exchange Assurance and Hand In Hand.
As was stated above, there were some early writings that point to the first insurance companies and types of insurance. Below are a number of these writings.
From 1680 the following memo was found. “Mr. Newbold, London’s Improvement and the Builders’ Security Asserted, by the apparent advantages that will attend their easie charge, in raising such a joint-stock as may assure a Re-Building of those Houses which shall hereafter be Destroyed by the Casualties of Fire.” This memo appears to point to the beginnings of fire insurance. There were many other memos found during that same time period from 1680 to 1700 all related to fire insurance companies.
In 1697 writings were found to show the beginnings of an insurance company created to insure the welfare of widows and orphans. This appears to be the early beginnings of life insurance. During the period of 1697 to 1762 many other memos were found relating to the establishment of life insurance. Some of the early known companies are The Society For Equitable Insurances, The Perpetual Assurance Office and The Hampshire Society. It wasn’t however until about 1850 that the first evidence of life expectancy actuary tables were found.
The first evidence of insurance for businessmen was memos found going back to the year 1601. Many different kinds of businesses were mentioned in these memos such as small businessmen, mining companies and ship building companies. Evidence also shows that the British took out insurance on their enemies’ ships for the purpose of collecting on them after they were destroyed by the British Navy.
In the next article we’ll go over the various types of insurance that one can purchase today.