Good question! First, it's good to understand what does not constitute insurance fraud. A good-faith disagreement between an insurance company and a consumer about a claim is not insurance fraud. Neither is an insurance company's decision to decline your insurance application or to not renew your coverage.
Insurance fraud occurs when people deceive an insurance company or agent to collect money to which they aren't entitled. Similarly, insurers and agents also can defraud consumers, or even each other.
Insurance fraud can be "hard" or "soft."
Insurance fraud can also be classified as either internal or external.
Internal Fraud occurs when the fraud is perpetrated against the insurance company or its policyholders by insurance agents, managers, executives or other insurance employees. Examples include:
External Fraud schemes are orchestrated against insurance companies by individuals or entities such as policyholders, medical providers, beneficiaries, vendors, chiropractors and career criminals. Examples include:
If you suspect insurance fraud, call the Fraud Tip Line at 1-888-FRAUD MN (1-888-372-8366).