Insurance Fraud is a crime in Texas. A person can go on-line to the Texas Department of Insurance to get a lot of information about insurance fraud.
According to the National Insurance Crime Bureau (NICB), insurance fraud is one of the most costly white collar crimes in America, ranking second only to tax evasion. NICB also says that 10% of all property and casualty insurance claims are fraudulent.
NICB has figures showing that property and casualty based insurance fraud costs Americans about $30 billion each year. To make a comparison, Hurricane Andrew, which was a devastating storm, only cost about $17 billion. Further if you added all types of insurance claims that are thought to be fraud, then the number jumps to $120 billion each year. What these numbers mean to the person buying insurance is an average of $200 to $300 each year in increased premiums. The hidden costs in the form of higher goods and services makes the costs to the average family about $1,000 per year.
Examples of insurance fraud are, 1) staged accidents, like car wrecks, 2) paper accidents, situations where no accident actually occurred but photos of previously damaged vehicles or building are submitted to the insurance company as claims, 3) exaggerated or inflated damages, 4) organized fraud rings involving attorneys, doctors, runners, body shops, 5) fake theft or robbery reports, 5) workers compensation claims where the injured emplyoyee was really injured somewhere besides work, 6) health care fraud, and the list goes on.
Chapter 35 of the Texas Penal Code makes insurance fraud a crime. Section 35.02 spells out the ways a person can be convicted of insurance fraud. Sub-part (c) defines the classification of the offense from a Class C ticket to a first degree felony punishable by up to life in prison. Sub-part (e) requires the convicted person to make restitution or in other words pay back all monies or benefits received by way of the fraud.
All the above speaks to the individual putting a fraud over on the insurance company. Keep in mind that a number of the topics on this and other blogs deal with how an insurance company commits fraud on its policy holders and the punishments faced by the companies when they are caught.
Here are a few ways to keep an eye on insurance companies. Insure the company and agent you are dealing with is licensed. This can be done by going to the Texas Department of Inusrance web-site. Consult with an experienced Insurance Law Attorney whenever you think something isn’t quite right.