The National Insurance Crime Bureau is calling attention to the growing impact of insurance fraud across the US.
In partnership with the Anti-Fraud Alliance, NICB has launched a national campaign encouraging consumers to learn about insurance fraud, share prevention tips within their communities and report suspicious activity that contributes to higher insurance costs.
Insurance fraud remains one of the most pervasive and costly financial crimes in the country. According to the Coalition Against Insurance Fraud, fraudulent claims cost the US approximately $308.6 billion annually, adding an estimated $900 in additional premiums to the average policyholder's annual insurance costs. These schemes can range from exaggerated or fabricated claims by individuals to complex operations involving staged accidents, false billing, and property damage scams.
“The cost and pain from insurance fraud is not invisible and is not felt by insurers alone – it hurts everyone,” said Ray Duncan, NICB’s West Region director of operations. He added that recognizing and reporting suspicious activity can help reduce fraud and its impact on consumers. “All of us can take steps to protect ourselves and educate those around us. These preventative measures can help to stop criminals before they take advantage of others.”
NICB warned that fraudsters often strike during moments of confusion or vulnerability when policyholders are most likely to act quickly and trust those offering help. Scammers may also pose as legitimate contractors, medical professionals, or tow operators to take advantage of insurance benefits.
Fraud takes many forms across different insurance lines. In home and property insurance, fraudulent contractors often appear after storms, wildfires or earthquakes, offering to perform repairs they never intend to complete, demanding upfront payments or pressuring homeowners to sign over insurance benefits.
In health insurance, consumers may face pressure to seek unnecessary treatments, fill unneeded prescriptions, or unknowingly participate in "medical mills" where they are bills for services never provided. In auto insurance, predatory tow truck operators or staged accident participants may overcharge or bill for damage and injuries that never occurred.
Common red flags include demands for cash upfront, inflated loss or injury claims, or assurances that “insurance will cover it.” NICB stressed that these patterns are consistent across fraud types and ultimately lead to higher costs for both insurers and consumers.
The organization is urging policyholders to familiarize themselves with the warning signs of insurance fraud and report suspected schemes to insurers or law enforcement. By increasing public awareness and cooperation, NICB aims to help reduce fraudulent activity and curb its financial impact on the insurance system.
