The Impact Of Insurance Fraud On Everyone

Insurance fraud is a serious issue that costs tax payers an estimated $40 billion annually. For a single family, the price tag is between $400 and $700 that they must pay on their premiums to compensate for what others have stolen. Private insurance companies and organizations that work to stop insurance fraud are among those that hire private investigators to reduce the impact of insurance fraud.

One reason that insurance fraud exists on such a grand scale is the number of insurance companies that are spread across the phoenix private investigatorcountry. The number of companies provides multiple opportunities for people to target the industry to receive money that they really have to right to. There are also multiple approaches taken to secure insurance money including the following:

•    Premium diversion in which employees of the insurance company embezzle insurance premiums.

•    Fee churning where a number of intermediaries receive commissions through reinsurance agreements.

•    Asset diversion by which employees steal the assets from the insurance company, particularly when a merger or the acquisition of an insurance company takes place.

•    Workers’ Compensation Fraud in which workers’ comp insurance is offered at a lower cost and then the funds are used inappropriately without really providing the supposed “insured” with coverage.

•    Disaster Fraud Schemes where those insured make false or exaggerated claims.

Some states sponsor fraud bureaus that will investigate suspected insurance fraud. Companies that suspect they may have employees who are stealing from them may call private investigators to perform background checks, surveillance and other investigative methods to determine the source of the theft. Individuals who think they are being inappropriately charged for their insurance coverage should contact the insurance company to learn the reason for any discrepancies in the premiums they pay and the amount due.

The Injured Worker

Workman’s Comp is one of the most abused insurance systems in the country. Employees are required to pay into the workman’s Comp system to protect their employees if they are injured on the job and accrue medical bills and loss of wages as a result. Employees who can convince their employers that they are more seriously injured than they really are, often by seeing doctors regularly and making symptoms a matter of record, can collect worker’s compensation while spending time off from work. The recent case of the beauty pageant contestant who was arrested for participating in a number of beauty pageants after she had filed for and received worker’s comp for a foot injury is a good example of how many of these schemes work. Private investigators took video footage of the woman participating in pageants wearing high heels and showing no obvious signs of discomfort.


Insurance fraud is another form of theft that takes money from insurance companies and tax payers every day. Reporting any suspicions of fraud or hiring private investigators with the expertise to find the fraud, either within the company or from the outside, will help reduce the impact these crimes have on people in America every year.