People lose jobs, careers and health coverage when insurance companies go bankrupt after being looted by fraud thieves. 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. 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 that steal millions of dollars.
Many people think it's just harmless fudging.
But soft fraud is a crime, and raises everyone's insurance costs. Fraud is Big Insurance fraud is hard to measure because so much goes undetected, and complete research has yet to be done. More than one third of people hurt in auto accidents exaggerate their injuries. Nearly one third of doctors exaggerate the severity of a patient's illness to help the patient avoid early discharge from a hospital, according to the Journal of the American Medical Association. Insurers sometimes back off.