Analysis of Insurance Fraud - Essay Example

Hard fraud, which is rare, occurs when one commits the crime of bringing about the destruction of property to claim compensation. Soft fraud, unlike hard, is where the insured exaggerates an otherwise legal claim or gives wrong information when applying for a policy to lower premiums. The most common fraud is where the value insured is more than the true value of the asset and the policyholder destroys the property and makes it look like an accident to benefit (Bourhis 7).

Other fraudsters fake death to collect payments from the life policies. Health care Insurance also experiences fraud cases perpetrated by either patients or physicians. Physicians commit fraud by misrepresenting treatments received by patients and patients commit fraud when they provide false information on applications, loan insurance cards, and when using transport benefits for non-medical purposes (Bourhis 9). Automobile fraud occurs when an insured submits a claim for false accidents, files multiple claims for one accident, claims compensation for injuries not related to an automobile accident, reports exaggerated repair costs or misreports wage losses because of injuries (Bourhis 9).