Insurance is one of the biggest sectors in the United States of America. The structure of this sector allows individuals to protect their lives and properties seamlessly. They are also set up to allow for claims of indemnity in the event of a loss. Despite all these, there have been several cases of insurance fraud in the United States of America.
Recent cases of insurance fraud have sufficed in the United States of America. These fraud ranges from employment, auto, property insurance fraud and others.
When there is a case of insurance fraud, how can insurance companies handle this? How can you report an insurance fraud? And What are the punishments for insurance fraud? This article discusses this subheadings in extension.
How To Identify Insurance Fraud
Insurance Fraud is a situation whereby a person is aware and intentionally obtains benefits to which they are not entitled.
As with the case of any fraud, it attracts severe punishments by the law. Insurance Fraud in the United States can be prosecuted when it fulfills this crime:
• The offender knowingly wanted to commit fraud. This usually means that the offender wanted and intentionally committed a crime.
• When the offender makes wrong or untrue information to the insurer. For example, in a contract of insurance, the offender provides a false address of his residency. This kind of untrue information can be said to be fraud.
• The ‘act’ and ‘intent’ of the crime must be ascertained. This ‘act’ simply means that the action has been carried out by the person. On the other hand, the ‘intent’ means that the purpose of that action must be determined.
• Financial loss may not be necessary as long as the act and the intent have been determined.
Insurance Fraud In The United States Of America Punishment
As stated earlier, Insurance Fraud is an illegal offense in the United States. The types of insurance fraud range from Health Insurance Fraud, Auto Insurance Fraud, Employment Insurance Fraud, and Property Insurance Fraud. Here are the punishments for the different insurance fraud in the USA:
Health Insurance Fraud Punishment
Health Insurance Fraud punishment is considered a serious punishment in the United States. It can attract the following punishment depending on the severity of the crime:
• Prison Sentence: Health insurance fraud can result in a ten-year imprisonment at most.
• Fines: The offender could pay a fine of up to ($25,000) if found guilty.
Auto Insurance Fraud Punishment
Auto Insurance Fraud punishment fraud can result in severe punishments. Some of them include:
• Imprisonment: You could be sentenced to prison for up to three years.
• Fines: The offender could pay fines of up to $2,500.
Restitution: This is one of the ways the insurer could recoup their money from a fraudster.
Probation: An offender may be placed on a few weeks or months of probation.
Unemployment Insurance Fraud Punishment
This is also a type of fraud punishable by the US laws. Here are some of the punishments an offender might receive:
• Disqualification: An offender may be disqualified from receiving permanently.
• Income Tax: You might forfeit your income tax reward.
• Fines: Offenders are usually subjected to receiving a fine or incarceration.
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Property Insurance Fraud Punishment
There are several laws prohibiting property laws in the USA. However, when you break any of the laws you will be required to face one of these punishments:
• Imprisonment: Offenders found guilty of property fraud may serve up to 12 years in prison.
• Fines: You could be ordered to pay a fine of up to $10,000.
• Community Service: An offender could be required to do work for the area he lives in for three months.
How To Report Insurance Fraud In The United States Of America
Here is a simple process for reporting insurance fraud in the United States of America:
Step 1: Contact State Bureau
If you suspect a case of insurance fraud in your organization contact the State Bureau. Most states in the USA make it convenient for you to report fraud. All you have to do is visit the official website of the state in the US or call the emergency numbers available.
Step 2: Contact The Insurer
The next step for you is to contact the insurance company. You can do this by visiting the company office. Additionally, you can call the insurance company via their hotlines.
Step 3: Call The NICB
The NICB is an acronym for National Insurance Crime Bureau. This agency is responsible for investigating insurance fraudsters. In addition, it prosecutes guilty offenders too. So, you can contact them or visit this link to report any insurance fraud case.
Conclusion
Insurance Fraud is a felony crime in the United States. An offender can land in prison for a long time if caught guilty.