Be Wary of Committing Insurance Fraud - You Could Get Caught!

PBS journalist Lisa Cullen took NBC's Nightline to task, in an article titled, "The Myth of Worders' Compensation Fraud. The piece was a response to inflammatory episode of Nightline in which a host claimed that Workman's Compensation Fraud was an estimated $5 billion per year.  Apparently this number is gross mis-approximation. Still, $1.2 billion is a tidy sum, but it's nothing compared to what Insurancefraud.org says.

According to their website, the total cost of nationwide insurance fraud is approximately $80 billion dollars.  Whew! That makes Workman's Comp fraud look like small change, eh?

As a licensed private investigator, I have worked my fair share of cases involving insurance fraud.  And while I am happy to read that Workman's Compensation fraud has declined, I have witnessed inumerable cases where our hardworking tax payer's dollars, or our fraud-inflated premium payments, would have been wasted on a fraudulent claim if it hadn't been for an insurance investigator getting to the heart of the matter.

Insurance Companies Hire Private Investigators to Catch Cheaters!

If you are thinking about committing insurance fraud by cheating the system, think again.  Not only is it dishonest and bad for your conscience, the outcome of your dishonesty can have dramatic ripple effects.

  • One of the smallest ripples, not that it makes it better for those of us paying the difference, occurs in insurance premiums.  American families spend $950 extra per year to cover losses caused by fraudulent claims. That's more than many Americans' monthly mortgage payments. Now why would you want to go and do that to the rest of us?
  • If - and when - you get busted by an insurance investigator, hired by a suspicious claims investigator, you will suffer severe penalties.  Obviously all that glorious money, and any of the luxurious assets you have acquired in the afterglow of the insurance benefit, will go bye-bye.  And if you don't have the money, and/or the assets you've accumulated don't pay the total bill, you will owe the insurance agency the difference.  This can mean garnished wages and tax returns for the rest of your life, depending on the amount of the claim.
  • You will almost always have to do jail time. Penalties for committing insurance fraud vary from state to state, depending on the type of fraud committed and the dollar amount involved.  In my state, The California Department of Insurance states loud and clear that, "Insurance fraud is a felony."  So there's that.
  • Your future employment options begin to look pretty bleak. Surprising as it may be, most employers want to avoid hiring liars and thieves.  Background checks, criminal records, and personal references can easily uncover your devious past exploits.  Getting a job with a criminal record is not impossible, but if an employer knows you committed insurance fraud in the past, s/he is probably going to pass your application over to the "round file".
  • You'll have to live with yourself, your family, and your friends. What an embarrassing existence that will be.  If you were one of those individuals who won a large settlement, your fall will be that much more painful.  Middle America starts looking pretty good when you are staring at life from the bottom of the humility barrel.

Don't let insurance fraud be the way you wind up at the other end of a private investigator's surveillance operation. Don't be a part of an insurance investigation.  It pays to have integrity!

“There's one way to find out if a man is honest: ask him; if he says yes, you know he's crooked.”  - Mark Twain

Published on: 
April 1, 2012
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