cost of fraud
The massive size of the industry contributes significantly to the cost of insurance fraud by providing more opportunities and bigger incentives for committing illegal activities. Costs of Fraud. The total cost of insurance fraud (non-health insurance) is estimated to be more than $40 billion per year.That means Insurance Fraud costs the average U.S. family between $400 and $700 per year in the form of increased premiums. Common Schemes.Premium Diversion.1  Premium diversion is the embezzlement of insurance premiums. 2  It is the most common type of insurance fraud.he massive size of the industry contributes significantly to the cost of insurance fraud by providing more opportunities and bigger incentives for committing illegal activities. Costs of Fraud. The total cost of insurance fraud (non-health insurance) is estimated to be more than $40 billion per year.