What is Insurance Fraud?

Insurance fraud occurs when individuals deceive an insurance company, agent, or other person to try to obtain money to which they are not entitled. It happens when someone puts false information on an insurance application, when false or misleading information is provided, or important information is omitted in an insurance transaction or claim.  

Insurance fraud can take many forms, such as falsifying claims, inflating the value of losses, or even staging accidents. Insurance fraud not only harms insurance companies financially but also lead to higher premiums for all policyholders. It's illegal and can result in criminal charges, fines, and civil penalties for those involved. 

For example: 

• Providing false information in applying for an insurance policy 
• Trying to obtain a claim of payment or benefit from an insurance policy that you are not entitled to. 
• Applying for insurance after the fact (e.g. car crash). 
• Reporting pre-existing damage as new to an insurance company. 
• Diverts, misappropriates, converts, or embezzles funds of an insurer, insured, claimant, or applicant for insurance. 

Hard Fraud: Someone deliberately fakes an accident, injury, theft, arson, or other loss to collect money illegally from insurance companies. Crooks often act alone, but increasingly, organized crime rings stage large schemes to steal millions of dollars. 

Soft Fraud: Normally honest people often tell "little white lies" to their insurance company for the purposes of filing or maximizing a claim. Many people think it's harmless fudging, but soft fraud is a crime and raises everyone's insurance costs. 

Detecting and preventing insurance fraud requires vigilance from both insurers and consumers, ensuring that claims are genuine and supported by legitimate evidence. 

Fraud is often perpetrated by scammers. People preying on the trust and promises of something better. Keep scammers away. Protect your family, bank account and yourself from crooks: Stay alert, ask questions, and go slow. 

Here are some general tips … 

• Be wary of door-to-door or telephone salespeople. 
• Contact your state insurance department to make sure your insurance agent or unfamiliar insurer are licensed. 
• Keep your Medicare ID number secret. Crooks can steal it and make scams against your coverage. 
• After a vehicle crash, take photos of the vehicles’ damage, and any injuries to passengers.  

If you suspect or have evidence of insurance fraud, report it. Insurance fraud affects us all through increased insurance premiums, and higher costs from businesses that have been defrauded. We will investigate and work to bring those who commit fraud to justice. 

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How to report fraud: 

Online

By phone: 
Main line: 651.539.1617 
Toll free: 888.372.8366
Fax: 651.539.1551 

By mail: Commerce Fraud Bureau, Address: 85 7th Place East, Suite 100, St Paul MN 55101 

By email: MNfraud.Bureau@state.mn.us