Insurance fraud hurts consumers, too

The Office of the Insurance Commissioner investigates criminal insurance fraud, receiving approximately 2,000 referrals each year. While insurance fraud may seem like a �victimless� crime � insurance companies carry large reserves of money in part to help pay claims � it actually harms consumers. Insurance fraud costs the average family $400 to $700 per year in increased premiums.



The OIC�s Criminal Investigations Unit (CIU) is staffed by law enforcement and criminal analysts who work with state and local prosecutors to bring charges against the people who are suspected of committing insurance fraud.

In 2017, our fraud investigators:
  • Analyzed and prioritized 1,896 fraud referrals.
  • Opened 102 criminal investigations and closed 93 criminal cases.
  • Submitted 33 complex criminal cases to county, state, and federal prosecutors.
  • Our work resulted in 33 criminal guilty pleas or convictions from 28 defendants.
Here are some examples of insurance fraud:
  • Buying insurance after you need it: Getting a policy after an accident or after a loss has occurred. We see this most often with auto collisions. 
  • Falsifying claims on homeowner or renter insurance: Claiming items that you didn�t actually own or falsifying the circumstances to increase the damage and the claim amount. 
  • Staging car crashes, intentionally causing car crashes (driving slow so someone rear-ends you), submitting fake medical bills after a collision, claiming a car was stolen. 
  • A medical provider billing for services or equipment that the consumer did not receive.
  • An insurance producer (agent or broker) holding onto consumers� premium payments or selling fake policies to earn commissions.
Consumers can help deter insurance fraud in a few important ways:
  • If you see something, say something � if someone tries to rope you into a scam or tries to make you or someone you know the victim of a scam, report it to us.  
  • Make sure you are working with a licensed insurance producer, and check their complaint history on our website. 
  • Read your policies, statements and explanations of benefits forms. The best way to not be a victim is to know what your policy covers, how much you are paying, and the claims your insurance company is paying on your behalf. 
  • The chances of getting away with insurance fraud are slim. Insurance companies have sophisticated data systems that immediately flag suspect claims. People who are convicted of insurance fraud and related crimes often become felons, which means you lose some of your rights like voting, traveling to certain countries, and some public benefits. 

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