Insurance fraud or false insurance claims are insurance claims filed with the intent to defraud an insurance company.

The Coalition Against Insurance Fraud estimates the loss to be $80 billion ($80,000,000,000) in the United States. Medicare estimates fraud in its system costs the government $179 billion ($179,000,000,000) a year. It has a reward program of up to $1,000 for citizens who report fraud.

Based on the above estimates, insurance fraud costs every man, woman, and child in the United States, $875 a year. The cost to a "typical" family of four would be $3,500 a year.

Insurance fraud hurts the average person in two ways. First, all fraud costs, including losses, investigations, etc.. are paid for by the insured through higher premiums, or, in the case of government insurance like Medicare, in higher taxes. Second, if a particular individual is the target for the fraud, they have costs such as deductible payments, loss of property use, etc., as well as higher premiums from the claim loss and the potential for denial of future coverage.

Some memorable examples of insurance fraud include the following:

• Former British Government minister John Stonehouse went missing in 1974 from a beach in Miami. He was discovered living under an assumed name in Australia.
• Derek Nicholson and Nikole Nagle were accused of attempting to defraud a life insurance company for $1 million after Mr Nicholson apparently went missing in New Jersey in July 2003 and Ms Nagle reported him missing and made a claim on the policy.

External links

• BBC article
• http://www.insurancefraud.org