Home Blog Insurance Fraud: Types, Prevention, Reporting, Legal Help

Insurance Fraud: Types, Prevention, Reporting, Legal Help

This page explains insurance fraud, its types, how to prevent it, and how a lawyer from ContractsCounsel can protect you.

Jump to Section

Insurance fraud can be described as deliberate deception for financial gain, and it can affect policyholders or insurance companies.

Policyholders engaging in fraud might commit actions such as creating fake injuries to submit a claim and be paid, while insurance agents might steal premiums from policyholders.

There are various ways in which insurance fraud can affect you, but there are effective ways in which to deal with it and recover your financial losses.

Read the rest of this article to learn about the common types of insurance fraud, how to spot it and deal with it, and how to prevent it in future.

What are Common Types of Insurance Fraud?

Some of the most commonly-reported types of insurance fraud include the following:

  • Ghost broking. This is the selling of fake insurance policies.
  • Claims fraud. This includes reporting false information or intentionally not disclosing information to insurance companies to receive payment for claims.
  • Estimates inflation. Contractors will inflate estimated costs for repairs. This is an example of third-party insurance fraud.
  • Insurance bad faith. This can include intentionally denying or delaying claims to avoid paying clients.

How Can You Prevent Insurance Fraud?

Both policyholders and insurance companies can prevent fraud. Tips for insurance policyholders include the following:

Document everything

This will help you strengthen your claims submitted to the insurance company and deter them from intentionally trying to avoid paying them.

Get your Policy Reviewed

You should review your insurance policy to identify any unfair, unjust, or vague sections that can be misinterpreted. Have the document legally reviewed by a lawyer who will use their legal knowledge to identify red flags, preventing issues in the future.

Although it might feel overwhelming to hire a lawyer for policy review, ContractsCounsel makes this an easy process. ContractsCounsel is an online legal network that connects clients with vetted lawyers on the platform for document review and drafting.

To get your policy reviewed by a professional lawyer, you can post a request for free on the platform. Multiple lawyers will send you bids. You can review their information to choose the best-suited lawyer for your needs.

Verify the Agent Identity

If someone calls you, claiming to be from your insurance company, you should verify their identity. Request their number and direct contact number at the company. Call the insurance provider directly if you’re unsure of the person who’s calling. They might be trying to steal your information.

Check that your Policy is Active

A type of insurance fraud involves agents stealing client premiums, resulting in lapsed policies. This can put you at risk of not knowing you’re not covered by your policy until you need to make a claim. To prevent this situation, regularly ensure that your policy is active and keep proof of your monthly payments.

Tips for Insurance Providers

  • Research claims thoroughly. This should involve conducting investigations, scrutinizing submitted documents, and interviewing claimants.
  • Streamline the claims process. By reducing human involvement in claim processes, insurance companies can minimize risks of human error.
  • Provide employee training. Regular training for insurance company employees can alert people to scams and risks, while encouraging the reporting of suspicious behavior.

How Can You Deal with Insurance Fraud?

If you’re the victim of insurance fraud as a policyholder, there are important steps to take promptly so that you can report the incident and recover your losses.

Gather Documents

You should collect all important documents that show evidence of the fraudulent behavior. This can include inflated contractor estimates or misleading insurance policies, as well as communication between you and the insurance company or agent.

Report the Fraud

You should report the instance of fraud to the insurance company and your state department of insurance.

When reporting insurance fraud, you should mention the following details:

  • Provide as many details as possible of the fraud, such as how and when it happened.
  • Provide personal details of the fraudster, if possible. This could include phone numbers, email addresses, or names.

Review Claims

You should always check and double-check your insurance claims to ensure that no one has changed important details. Look for inconsistencies, such as a lack of evidence or amended claim amounts. Check all your personal and banking information, as fraudsters could change these details to divert payments into their accounts.

Secure Your Accounts

If you suspect you’ve been a target of insurance fraud, you should act quickly to minimize your financial losses. This is especially important if you shared private information with a suspected scammer. Let your financial institutions know about the fraud and change all your account passwords.

Consult an Insurance Fraud Lawyer

Whether you’re a victim of fraud or being accused of it, hiring a lawyer will ensure you receive the legal support you need. Here is how they can help you.

For policyholders:

  • A lawyer will review your insurance policy. This will alert you to ghost broking, a scam involving the selling of fake insurance policies. They will also be able to clarify complex insurance jargon to strengthen your case.
  • They will help you negotiate with contractors or agents involved in the insurance fraud to recover your losses.
  • They will fight against any wrongful claim denials, showing evidence of your claim.
  • If you’re dealing with a bad faith insurance company, your lawyer will file lawsuits against them.
  • They will negotiate settlements from your insurance company.
  • They’ll assist you with reporting the fraud.

For insurers accused of fraud:

  • A lawyer will analyze and investigate your case to strengthen it.
  • They’ll gather evidence to show that your claims are legally sound.
  • They’ll represent you if you’re taken to court or investigated for fraud.
  • They’ll deal with law enforcement and investigators involved in your case.
  • They’ll handle communication with the other party so that you don’t land in legal trouble or accidentally create complications.

Do you need a lawyer for insurance fraud?

Contact a lawyer on ContractsCounsel. You’ll work with a lawyer experienced in insurance fraud to find the best option to resolve the case and recover your money. Lawyers on the platform are skilled to provide thorough and legally-sound services for all types of insurance fraud.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


Need help with a dispute

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 24,529 reviews

Meet some of our Lawyers

Jordan M. on ContractsCounsel
View Jordan
5.0 (2)
Member Since:
October 14, 2021

Jordan M.

Partner
Free Consultation
Houston, TX
7 Yrs Experience
Licensed in TX
University of Houston Law Center

I am a software developer turned lawyer with 7+ years of experience drafting, reviewing, and negotiating SaaS agreements, as well as other technology agreements. I am a partner at Freeman Lovell PLLC, where I lead commercial contracts practice group. I work with startups, growing companies, and the Fortune 500 to make sure your legal go-to-market strategy works for you.

Tabetha H. on ContractsCounsel
View Tabetha
5.0 (39)
Member Since:
October 26, 2021

Tabetha H.

Attorney at Law
Free Consultation
San Jose, CA
28 Yrs Experience
Licensed in CA
UCLA

I am a startup veteran with a demonstrated history of execution with companies from formation through growth stage and acquisition. A collaborative and data-driven manager, I love to build and lead successful teams, and enjoy working full-stack across all aspects of the business.

Recent  ContractsCounsel Client  Review:
5.0

"Tabetha provided feedback on a legal document in a timely and thorough manner. I plan to use her services going forward."

Orin K. on ContractsCounsel
View Orin
5.0 (3)
Member Since:
October 24, 2021

Orin K.

Partner
Free Consultation
New York
22 Yrs Experience
Licensed in NY
New York Law School

I'm an employment lawyer. I counsel and represent employees in all professions, from hourly workers to doctors and executives, and all in between. I also counsel and represent employers in many aspects of employment law.

Recent  ContractsCounsel Client  Review:
5.0

"Orin was very flexible, clear and communicative. I would highly recommend."

Elbert T. on ContractsCounsel
View Elbert
4.8 (7)
Member Since:
March 31, 2022

Elbert T.

Attorney
Free Consultation
Oklahoma City
5 Yrs Experience
Licensed in OK
Oklahoma City University School of Law

Elbert Thomas is the founder of the Thomas Law Group, LLC. Elbert is proficient in contract creation, drafting, reviewing, and negotiating various business contracts and demand letters in industries such as construction, personal, professional services, non-profits, and real estate. Elbert typically represents small and large companies in drafting and negotiating countless agreements such as purchase sale agreements, interconnection agreements, lease agreements, demand letters, cease & desist letters, transfer of deeds in real property, and merger/acquisition agreements. In addition, Elbert is also experienced in start-ups, small business formation, drafting operating agreements, and estate planning.

Recent  ContractsCounsel Client  Review:
5.0

"I enjoyed working with Elbert. He is thoughtful and willing to walk an ambiguous idea forward with you until there's clarity."

Grant P. on ContractsCounsel
View Grant
Member Since:
October 12, 2021

Grant P.

Founder
Free Consultation
New York
23 Yrs Experience
Licensed in FL, NJ, NY
Brooklyn

Founder and owner of Grant Phillips Law.. Practicing and licensed in NY, NJ & Fl with focus on small businesses across the country that are stuck in predatory commercial loans. The firm specializes in representing business owners with Merchant Cash Advances or Factoring Arrangments they can no longer afford. The firms clients include restaurants, truckers, contractors, for profit schools, doctors and corner supermarkets to name a few. GRANT PHILLIPS LAW, PLLC. is at the cutting edge of bringing affordable and expert legal representation on behalf of Merchants stuck with predatory loans or other financial instruments that drain the companies revenues. Grant Phillips Law will defend small businesses with Merchant Cash Advances they can no longer afford. Whether you have been sued, a UCC lien filed against your receivables or your bank account is levied or frozen, we have your back. See more at www.grantphillipslaw.com

Jonathan K. on ContractsCounsel
View Jonathan
Member Since:
November 12, 2021

Jonathan K.

Principal
Free Consultation
New York, Europe (Germany, UK)
17 Yrs Experience
Licensed in NY
Georgetown University Law Center

Pico & Kooker provides hands on legal advice in structuring, drafting, negotiating, interpreting, managing and enforcing complex high value commercial transactions. Adept at navigating complex environments, Jonathan has extensive expertise advising clients on a wide range of long- and medium-term cross border and financial engagements, including public tender participation, PPPs, export sales agreements as well as policy and regulatory formulation. Jonathan and his co-founder, Eva Pico have represented and acted on behalf of lenders, global corporations and other market participants across a range of industries including financial services, infrastructure and transportation. As outside counsel, Pico & Kooker, has developed a strong rapport and working relationship with their clients and appropriately work with their in-house teams to increase consistency, processes and procedures. The company employs a unique approach as practical, business minded outside legal counsel who believe in proactively partnering with their clients to achieve desired results while managing and engaging key stakeholders. They listen to their clients to develop customized solutions that best meet their needs while aligning with their objectives, vision and values. Some representative transactions include advising the World Bank on project finance and portfolio options to address the costs and risks associated with integrating renewable power sources. Also advising them as legal counsel, Jonathan developed policies, regulation and models for emerging market governments entering into public-private partnerships. In addition to his work with the World Bank, Jonathan has worked with some of the world’s largest consulting firms, financial institutions and governmental organizations, including the United Nations, the governments of the US, UK and select African countries. Through out his career, he has worked with large, multinational corporations both by consulting in-house and acting as outside counsel on large cross-border transactions. He graduated from Georgetown University’s law school and was admitted practice as a lawyer in New York, England and Wales and, as a foreign lawyer, in Germany. He has written several articles for trade journals and has been cited by several business publications in worldwide. Jonathan is a native English speaker and has high proficiency in German and a functional understanding of Spanish.

Reuben O. on ContractsCounsel
View Reuben
Member Since:
October 21, 2021

Reuben O.

Senior Managing Attorney
Free Consultation
Seattle/Boise
17 Yrs Experience
Licensed in ID, WA
The University of Iowa

As an entrepreneur at heart, I enjoy working with business owners and executives on a variety of corporate matters, including mergers and acquisitions, corporate financing, corporate governance, public and private securities offerings, privacy regulation and early-stage corporate matters including formation. As a lawyer and business professional, I understand the value of providing personal service and focused legal answers to clients navigating a rapidly changing regulatory environment. Whether in Aerospace, Consumer Goods, or Technology, I find great success in work collaboratively with clients to strategical structure their business or implementing strategic growth-oriented financing opportunities.

Thaddeus W. on ContractsCounsel
View Thaddeus
Member Since:
October 22, 2021

Thaddeus W.

Principal
Free Consultation
Los Angeles, Ventura County, New York City
29 Yrs Experience
Licensed in CA, NY
University of Notre Dame Law School

Experienced legal counsel to entrepreneurs, small businesses, and investors. Advising clients starting, buying, selling, operating, financing, and investing in businesses // U.S. Army Veteran // Ironman Triathlete, Marathoner, Open Water Swimmer, USAT Triathlon Coach // Lover of Dogs, Cribbage, Craft Beer, Bourbon, and Cigars

Nichole C. on ContractsCounsel
View Nichole
Member Since:
October 22, 2021

Nichole C.

Attorney
Kentucky
20 Yrs Experience
Licensed in KY
University of Louisville, Brandeis School of Law

Licensed attorney in KY and Federally JD, 2006 University of Louisville MBA, 2006 University of Louisville BS, 2001 Berea College Licensed Title Agent Arbitrator and Certified Mediator Business Consultant Adjunct Professor, Law and Business

Michelle F. on ContractsCounsel
View Michelle
Member Since:
January 24, 2022

Michelle F.

Attorney
Free Consultation
New York
8 Yrs Experience
Licensed in NY
Touro College Jacob D. Fuchsberg Law Center

I provide comprehensive legal and business consulting services to entrepreneurs, startups and small businesses. My practice focuses on start-up foundations, business growth through contractual relationships and ventures, and business purchase and sales. Attorney with a demonstrated history of working in the corporate law industry and commercial litigation. Member of the Bar for the State of New York and United States Federal Courts for the Southern and Eastern Districts of New York, Southern and eastern District Bankruptcy Courts and the Second Circuit Court of Appeals. Skilled in business law, federal court commercial litigation, corporate governance and debt restructuring.

Steve C. on ContractsCounsel
View Steve
Member Since:
October 26, 2021

Steve C.

Principal | Attorney
Free Consultation
Irvine
27 Yrs Experience
Licensed in CA
Loyola Law School

I am a corporate and business attorney in Orange County, CA. I advise start-ups, early-growth companies, investors, and entrepreneurs in various sectors and industries including technology, entertainment, digital media, healthcare, and biomedical.

Find the best lawyer for your project

Browse Lawyers Now

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with a dispute

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 24,529 reviews
CONTRACT LAWYERS BY TOP CITIES
See All Insurance Lawyers
INSURANCE FRAUD LAWYERS BY CITY
See All Insurance Fraud Lawyers

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

Need help with a dispute

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 24,529 reviews

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city