How Does Fraud Affect Me?

Good question. Insurance crooks are picking your pocket to line theirs. Insurance fraud is one of America's largest crimes — at least $80 billion is stolen each year.

We pay. Honest consumers like you pay. Lives, families, businesses and careers are wrecked, your money is stolen, and your insurance premiums rise.

Is scamming worth it? No. Those who commit fraud could go to jail, pay big fines, damage their permanent criminal record, and/or lose their job.

Fight back and win. You can keep scammers away. Protect your family, bank account and yourself from crooks: stay alert, ask questions and go slow.

Sign up for DIFS' Consumer Alerts. Here are some general tips:

  • Be wary of people calling or stopping by immediately after a car accident, especially if you didn't reach out to them first.
  • Check the DIFS Agent Locator to make sure your insurance agent or unfamiliar insurer is licensed.
  • Keep your Medicare ID number secret. Crooks can steal it and make false claims against your coverage.
  • After a vehicle crash, take photos of the vehicles, damage and passengers. You can prevent fake injury and damage claims.
  • Contact your state insurance department or National Insurance Crime Bureau (1-800-835-6422) to report a scam.

Hunting down scammers

Anti-fraud units. Most insurance companies combat fraud with trained investigators.

Sue swindlers. Some insurers courageously sue fraud ringleaders to recover stolen money. Civil suits relay a strong message: cheating that insurer is a path to ruin.

Join forces. Insurers sponsor national groups that are putting pressure on scammers.

Fraud bureaus. These state agencies investigate suspected schemes for potential prosecution. You’ll find them in 41 states.

Tougher fraud laws. Fraud is a specific crime in nearly all states. Tough fraud laws also are made every year. They clamp down on shady contractors, bogus airbags, staged-crash rings and other insurance crimes.

Medicare cracks down. Medicare Fraud Strike Forces are hunting down schemers in hotspots. Medicare also is booting more crooked medical providers from the system — and keeping them out.

Why is fraud so big?

America’s fraud fight needs to improve, despite much progress. Gaps need closing — and fraud fighters are working hard on it.

Health system an easy target. Medical providers exploit automated billing systems with cleverly disguised treatment claims.

Low-risk crime. Cheaters view insurance fraud as a low-risk, high-reward gambit. Even drug dealers have entered insurance fraud.

Insurers back off. Most insurers actively combat fraud. But some still pay certain suspicious claims. They believe it's cheaper than going to court.

Low legal priority. Prosecutors often give top priority to combating drugs, violence and other high-profile crimes.

Too much tolerance. Some people mistakenly think insurance fraud is a harmless prank.