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  • Dean Smith

Ten Frequented Types of Insurance Fraud weighs in on ten frequented types of insurance fraud:

1. Vehicle Theft

Vehicle Theft fraud scams are most commonly carried out by people that sell their vehicles to a chop shop, or a body shop that will strip the vehicle to sell the parts for profit, and the owner of the vehicle will report it stolen to the authorities and the insurance company.

Others commonly leave their car in a remote area and burn it, or sell their cars to buyers overseas without a paper trail and report it stolen once it has arrived to the buyer.

2. Staged Accidents

Two drivers will orchestrate a crash, specifically to collect nice payouts from the corresponding insurance companies. It’s even been documented that some of the “witnesses” that happened to be in the right place at the right time during some staged accidents were also in on the scam. According to, it becomes expensive when “the value of the vehicles is greatly inflated and the insurance payoff is for two totaled vehicles.”

3. Inflated Vehicle Damage

Accidents do happen, but when the amount of damage inflicted on the vehicle is fabricated or inflated for the purpose of collecting a higher payout, some people overlook the fact that they’re committing insurance fraud, which increases everyone’s premiums. People also tend to report damage to the car, collect a check after an estimate, and spend the money on something other than getting their vehicle fixed as intended.

4. Health Insurance Billing Fraud

In this case, the consumer becomes the victim without any awareness when “health care providers bill health insurance companies a high fee for a standard procedure, or bill for services that were never rendered,” according to

5. Unnecessary Medical Procedures

Crooked doctors are ordering unnecessary tests and procedures and billing your insurance companies to collect more money. Make sure the procedures and testing make sense. If you or a claimant schedule an appointment because of a sustained knee injury and your doctor suggests a blood test, you may want to question the integrity of the physician.

6. Staged Home Fires

A homeowner will document and calculate the value of their belongings and set fire to their home to collect. Another variation of home fire scams includes the removal of important items beforehand, but the homeowner still claims that the items have been lost in the fire, resulting in payment for items he or she still has possession of.

According to, it is common that “the homeowner is not home and can account for his whereabouts when the event took place. Criminals are hired to set fire to the home, or break in and vandalize the home to make it look like the homeowner was victimized.”

7. Natural Disaster Fraud

Fraudsters will capitalize on any opportunity, including times of misfortune in the days after a natural disaster or major storm. Most frequently, a homeowner will inflate the damages or make up a claim entirely. When the insurance company is busy dealing with an overload of major claims, some smaller, fraudulent claims can slip through the cracks.

8. Abandoned House Fires

Majority of the time, abandoned house fire scams occur when a homeowner has relocated and cannot sell the home, or “a landlord owns a home in a neighborhood that is no longer popular and cannot get tenants to help pay the mortgage,” according to

9. Fake Death

After a life insurance policy is in effect for numerous months, the policyholder will fake their own death, resulting in a death benefit payment made to the beneficiary, most commonly the spouse. Once cleared, the fraudsters typically disappear.

10. Renter’s Insurance states that “people who rent homes or apartments will often take out inexpensive renter’s insurance policies to cover the cost of their possessions. Prior to moving out of the home or apartment or when financial times get bad, the insured will sell their possessions and then report them stolen to collect the insurance money.”

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