Insurance fraud hits everyone in the wallet

We all pay for insurance fraud. A 2022 study conducted for the Coalition Against Insurance Fraud concluded that insurance fraud costs Americans $308.6 billion every year. That's $932.63 for every person in America. For a family of four, that adds up to nearly $3,800.

I want to discuss things you should know about insurance fraud. But first, here are three things you should remember about this type of white-collar crime:

Don't ignore red flags. If you are suspicious about anything dealing with insurance fraud, stop and call the Department of Insurance at 855-408-1212. Consumer experts are available to help you weekdays from 8 a.m. to 5 p.m. Or you may find us online at www.ncdoi.gov.If you are a victim of fraud, report it. You may anonymously report fraud by calling our Criminal Investigations Division at 919-807-6840 or toll free from anywhere in North Carolina at 888-680-7684. You may also report it online at www.ncdoi.gov/fraud-control.Consumers can also commit insurance fraud. Insurance fraud is a crime which leads to higher rates for all consumers.

Here's how insurance fraud increases rates. All businesses must take losses into account when determining the price of a product. For example, stores take shoplifting and other forms of theft into account when setting prices.

Insurance fraud is a form of theft. Insurance companies must take fraud into account when setting rates. Some estimates suggest that 20 cents of every premium dollar goes to paying for the cost of insurance fraud.

Fraud comes in various shapes and sizes. While some insurance fraud acts are intended to defraud consumers, others are committed by consumers.

Fake insurance companies or agents defraud consumers by taking money for premiums on bogus policies with no intention of paying claims, including these scenarios:

Scammers may offer fake policies at costs that are significantly lower than competitors' prices.Companies may sell non-insurance products marketed to look like insurance. For example, an agent working for a company may sell health discount plans, calling the plan "insurance" when it is an unregulated, non-insurance product.A dishonest agent may collect a premium from a customer without forwarding the payment to the company. The consumer believes premiums are paid, while the insurance company has no record of payment and cancels or does not renew the policy.

If you have any doubts, stop before signing any paperwork or paying your premium and call the Department of Insurance.

Consumers can also commit fraud. One common form is a motorist deliberately staging an automobile accident. Or a consumer may exaggerate a legitimate claim, falsify documents supporting a claim or provide false information on an insurance application or claim form.

I hope these tips help you avoid becoming a victim of fraud. Together, we can work to fight insurance fraud and slow the increase in premiums.