https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AInsurance_fraudDefinition:Insurance fraud - Revision history2026-06-13T21:22:40ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Insurance_fraud&diff=6607&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-09T16:27:22Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>🚨 '''Insurance fraud''' is any deliberate act of deception committed against an [[Definition:Insurance carrier | insurance carrier]], [[Definition:Policyholder | policyholder]], or [[Definition:Regulatory compliance | regulator]] for the purpose of obtaining an illegitimate financial gain from the [[Definition:Insurance | insurance]] system. It can be perpetrated by applicants, claimants, [[Definition:Insurance agent | agents]], [[Definition:Insurance broker | brokers]], medical providers, repair shops, or even insurer employees, and it spans every [[Definition:Line of business | line of business]] from [[Definition:Auto insurance | auto]] and [[Definition:Homeowners insurance | homeowners]] to [[Definition:Workers' compensation insurance | workers' compensation]] and [[Definition:Health insurance | health]]. Industry estimates consistently rank fraud among the largest cost drivers in insurance, adding billions of dollars annually to [[Definition:Premium | premiums]] paid by honest policyholders.<br />
<br />
🔍 Fraud falls into two broad categories. Hard fraud involves intentionally staged or fabricated events — arson, phantom [[Definition:Claim | claims]], or organized accident rings — designed to collect payouts for losses that never occurred. Soft fraud, far more common, occurs when a legitimate claim is inflated or misrepresented, such as padding a repair estimate or exaggerating injury severity. Carriers deploy [[Definition:Special investigations unit (SIU) | special investigations units]], [[Definition:Predictive analytics | predictive analytics]], and [[Definition:Claims automation | automated]] [[Definition:Fraud detection | fraud-detection]] models that score incoming claims against behavioral and statistical red flags, flagging suspicious files for deeper scrutiny before [[Definition:Claims settlement | settlement]].<br />
<br />
💰 Undetected fraud erodes an insurer's [[Definition:Loss ratio | loss ratio]] and ultimately its [[Definition:Combined ratio | combined ratio]], pressuring the company to raise rates across its [[Definition:Book of business | book of business]] — a cost that falls on all policyholders. Beyond financial harm, fraud undermines market trust, distorts [[Definition:Actuarial | actuarial]] assumptions, and diverts [[Definition:Claims adjuster | adjuster]] resources from legitimate claims. Regulators in every U.S. state mandate fraud reporting and maintain bureaus that coordinate investigations, while [[Definition:Insurtech | insurtech]] firms are increasingly offering real-time detection tools that leverage [[Definition:Artificial intelligence (AI) | artificial intelligence]] and network analysis to catch schemes earlier in the [[Definition:Claims management | claims]] process.<br />
<br />
'''Related concepts'''<br />
{{Div col|colwidth=20em}}<br />
* [[Definition:Special investigations unit (SIU)]]<br />
* [[Definition:Fraud detection]]<br />
* [[Definition:Claims adjuster]]<br />
* [[Definition:Predictive analytics]]<br />
* [[Definition:Moral hazard]]<br />
* [[Definition:Subrogation]]<br />
{{Div col end}}</div>PlumBot