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What is Homeowners Insurance Fraud?

This type of fraud takes place when someone knowingly submits an inflated claim on their homeowners or renters policy for more than the actual value of the loss or damage. Submitting a false or misleading claim to receive undeserved compensation is also considered homeowners fraud.

The most common types of homeowners insurance fraud involve:

  • overstating the value of stolen items in a burglary of a home or vehicle
  • lying about the extent, cause, date or location of damage
  • intentionally damaging property to make a claim
  • staging a phony burglary or vehicle break–in and faking the theft or damage of property
  • asking a repairman to "cover the deductible" by increasing their estimate or bill
  • fabricating supporting evidence, such as repair bills or receipts, often in collusion with a crooked contractor, plumber, repairman or insurance adjuster
  • concealing that a residence is used as a rental or in a commercial business


Here are a few typical scenarios to illustrate some of the different ways homeowners insurance fraud can be committed:

A strong storm blew the shingles off of Jane's house. When the insurance adjuster inspected the roof, Jane also said some siding was damaged during the storm, even though the siding had been damaged when Jane bought the house.

During a trip to Mackinaw City, Jessica's car was broken into. Her motor vehicle insurance paid to fix the damage done to the car. On her homeowners insurance claim, she said the items she lost were a lot nicer than they really were — a leather coat instead of a denim jacket — and she added a few extra items to the list she gave to her homeowners insurance company.

Karen's big screen TV quit working, then her home was struck by lightning. She told her insurance company the TV had been damaged by the electrical storm.


Homeowners insurance fraud is a serious crime. As with all other types of insurance fraud, Michigan considers it a felony. Violators can spend up to four years in jail and spend up to $50,000 in fines. There are also many other associated expenses such as court costs and legal fees. Plus, those found guilty of insurance fraud have the stigmas and limitations of being a convicted felon to carry with them for life.