TAMPA, FL, December 29, 2010 Presenting misleading information when applying for insurance or exaggerating insurance claims is costly to all policyholders because it adds to the costs associated with insurance fraud, according to the Insurance Information Institute. In the wake of the economic recession there has been an increase in fraud schemes and insurance-related crimes, and efforts are being stepped up to combat fraud and help lower the cost of insurance in Florida.


“When someone tries to reduce their own insurance costs by misrepresenting information on insurance applications or on claims forms, honest policyholders wind up with higher insurance premiums,” said Lynne McChristian, Florida representative for the I.I.I. “People who commit this type of fraud may think it’s harmless, but insurance fraud is a crime we all pay for.”


The I.I.I. points out that when applying for auto insurance, insurance fraud is committed if someone says they drive fewer miles to work than they actually do, or if they claim to park their car in the garage when it is really parked on the street, making it more vulnerable to drive-by damage.


When filing an auto, homeowners or renters insurance claim, insurance fraud is committed if someone intentionally:

  • Allows a body shop to pad the car repair bill as a way to recoup the deductible.
  • Inflates the value of possessions stolen from a home or car.
  • Inflates the value of jewelry or other goods that were lost.
  • Asks a repairperson or public adjuster to pad a bill for property damage.


When applying for life insurance, insurance fraud is committed if someone intentionally:

  • Misrepresents their medical history so they seem healthier than they really are.
  • Say they don’t smoke, or don’t have a history of smoking, when in fact they do.


When filing a workers compensation claim, insurance fraud is committed if someone intentionally:


  • Says an injury received at home or while playing sports was work related.
  • Falsely reports or fabricates an injury.
  • Stays home even when he or she is healed.
  • Receives benefits as a result of a reported inability to work, yet is receiving compensation from another employer.

Businesses that are applying for workers compensation coverage commit insurance fraud if they report that the company has fewer employees than it really has, or if it reports that employees have safer jobs than they really do.

Insurance fraud is not a victimless crime, since the victims are honest policyholders who are forced to pay higher insurance rates to cover the costs. Insurance companies are required to have internal investigation units that look for “red flags” that may be fraud indicators as a service to help reduce the burden that fraud places on all policyholders.


Additionally, Florida has a Division of Insurance Fraud within the Florida Department of Financial Services (DFS) with a mission to serve and safeguard citizens against acts of insurance fraud. The DFS offers a reward of up to $25,000 for information leading to the arrest and conviction of people who commit complex, organized insurance crimes. The National Insurance Crime Bureau (NICB), a nonprofit organization that receives support from more than 1,000 property/casualty insurers, has a fraud report line: 800-TEL-NICB. The NICB also has a tip line for cellphones that can be accessed by texting the keyword “FRAUD” to TIP411 (847411).