The Cost of Personal Underwriting Fraud

Underwriting fraud occurs when an individual provides false information to a company for the purpose of their own personal gain. It can be as simple as registering your automobile in a state that has lower rates in order to save some money on your premium. As for home and properties, arson is one of the most widespread tools for property fraud. Fraud occurs in the world of health coverage when a patient withholds information about a pre-existing condition. In most states, this type of fraud is considered a felony or misdemeanor, depending on the crime. According to the Federal Bureau of Investigation, the total cost of fraud is more than $40 billion a year. This total number also does not factor in health fraud. The Coalition Against Fraud reports are higher, claiming that $80 billion is lost annually. The National Health Care Anti-Fraud Association estimates that the financial losses due to health care fraud are in the tens of billions of dollars each year. The Coalition Against Fraud also reports that Americans are tolerant of fraud however they shouldn’t be. Fraud inevitably translates into higher premiums and out-of-pocket expenses for consumers, as well as reduced benefits and coverage.