Even though most people don’t think about insurance fraud every day, it’s essential to be aware of it, especially during these difficult times. COVID-19 has significantly influenced the rise of fraudulent activity, as more and more scammers see this pandemic as an opportunity to get extra income. Today, fraudsters are always coming up with new ways to trick you and take advantage of your investments, which is the reason why you need to stay alert and find out how you can prevent insurance fraud in 2022.

What is insurance fraud?

Insurance fraud can be defined as a crime, which can cost the victim lots of money as scammers present it as increased premiums and ask for extra money for goods and services. Since most insurance frauds go unreported, it’s difficult to come up with the exact cost. Whether it’s related to health, life, or non-life insurance, fraud consists of three parts: fraud, waste, and abuse. Also, fraud is when someone makes a fake claim. For example, there’s a case in which a person faked his own death, in order to reap the benefits of his life policy with his wife in another country. In the field of healthcare, scammers could be dentists seeking benefits for services they didn’t deliver. When it comes to waste as the second part of insurance fraud, it refers to a situation in which a provider charges money for unnecessary services, resulting in a waste of resources. As for abuse, it would refer to overusing resources, for instance, where a whole family would take advantage of massage services.

What is junk insurance?

The widespread practice of lenders taking advantage of customers by selling unnecessary products which are further attached to loans and credit cards is known as junk insurance. When getting a loan to buy a car, for example, there’s a high possibility of banks and finance companies charging you worthless junk insurance, costing you a huge amount of money. In those cases, it’s essential you seek a service provider that can help you claim a junk insurance refund from the bank. As the process of making a claim can be stressful and time-consuming, turning to professionals will make everything much smoother. 

Insurance fraud includes many forms 

As previously mentioned, insurance fraud can take many forms, from a healthcare provider claiming services that were not provided to employees collecting their compensation benefits while being employed. Other frauds would include drivers staging a fake accident in which doctors and lawyers would aid in handling connected medical and lawsuit claims. 

Be informed

Even though an insurance premium presents a great expense for a big majority of consumers, it’s based on your unique record of claims and the level of risk that is at stake. All in all, it could be said that the higher the risk, the greater the premium. For instance, since a huge amount of Cadillacs are being sold each year, the premium for theft related to a Cadillac will be higher than that of a Toyota. Likewise, stock car racers will spend more money on life insurance as opposed to librarians.

Ask for ID proof from your insurance agent

Consumers can sometimes become victims to corrupt agents or brokers. All of the agents working for insurance agencies need to go through demanding training and are required to have ID proof. For example, the first thing you need to do if an agent approaches you is to ask for their ID and call the number of the customer care service of the insurance company to validate their identity. This is considered a safety measure that’s meant to rescue you from becoming a victim of insurance fraud.

Don’t pay in cash

You should have in mind that no insurance agent will ever ask you to pay in cash. Furthermore, if you want to confirm the details written on the cheque, you need to call the customer care center. In this way, you will make sure you don’t deposit the funds to a name that sounds similar to yours and avoid becoming an insurance fraud victim. 

Hopefully, these tips will help you in becoming aware of the many insurance fraud cases that are current today as well as aid you in successfully preventing them in 2022.