The majority of reported fraud claims are committed by average people submitting claims that are not entirely truthful. Remember, in its simplest form, FRAUD is when an individual misrepresents FACTS to an insurance company concerning a claim or policy.

What is Fraud? 

Fraud is the intent to deceive a company or person for financial gain. 

What is Insurance Fraud?

Insurance fraud is when a person or company deceives an insurance company or person into paying an amount they are not entitled to receive. 

Why is preventing insurance fraud important?

Insurance fraud costs Arizona consumers millions of dollars each year. If you’re an insurance consumer, you pay higher premiums because of fraud.

Common ways to commit fraud include:

• Falsely reporting stolen or damaged items (electronics, vehicle, equipment) that were not stolen or destroyed or in some cases
  • This also includes reporting items artificially made to look like they were stolen or destroyed
• Claiming repairs or services given but not completed or needed (auto glass, vehicle body repairs, medical services, or equipment)
• Exaggerated complaints about injury, disabilities (fake slip/falls, worker’s compensation, or disability claims)
• Misrepresenting information on insurance applications
• Providing false information to an insurance company regarding the date of loss
• Providing false insurance coverage to medical professionals

Fraud is not a victimless crime nor is it considered a cost of doing business or a business loss.  The Federal Bureau of Investigations estimates that “Insurance Fraud costs the average U.S. Family between $400 and $700 per year in the form of increased premiums.”  

How to Prevent Fraud

• As a consumer, understand the terms and conditions of any policy or product before signing a contract or exchanging payment.  
• Verify the company or insurance producer (agent) is authorized to do business in Arizona.  For more information on how to do this, visit our license search page or sbs.naic.org.
• Be wary of high-pressure sale tactics designed to push you into making a decision before doing any research on the product, the representative, or the company.
• Before accepting services that ask for your insurance policy information understand what they intend to do with this information and how they are expecting to receive payment.
• Review all statements to ensure services were performed and billed accurately and report any discrepancies.
• Avoid the temptation to make a false claim.  Knowingly filing a false claim is illegal and may have consequences that result in a cancellation of your policy, monetary penalties, or jail time.