Arkansas ranks within the top 10 states for major disaster declarations. When we think of weather-related events, insurance fraud isn’t the first thing to come to mind. Instead, we worry about damaged homes, lives lost, uprooted families, ruined businesses, and destroyed cities and towns. But after a weather-related event is over, insurance fraud often rears its ugly head.
The National Insurance Crime Bureau, a non-profit organization in North America that addresses insurance-related crimes, states that around 10 percent of insurance claims on property are fraudulent. As weather-related events start to increase in size and frequency, it’s predicted that fraudulent insurance claims will also start to rise. With the help of property claims services, you can weed out fraudulent claims so your insurance company doesn’t have to pay out more than is necessary.
Property Claim Fraud
After a weather-related event has passed, business and home owners are quick to call their insurance agencies to make a claim on property. While not considered first responders, insurance claims professionals are usually among the first individuals to respond after a storm.
Insurance fraud is not a victimless crime. Payouts from insurance companies help homeowners, charitable organizations, educational institutions, and business owners return to normal after a devastating weather-related event. Without these disbursements, these entities could find it impossible to rebuild. Fighting against insurance fraud ensures that both the insureds and the insurance industry remain financially viable. Insurance fraud causes policy costs to increase for everyone.
When an individual files inflated or false claims on property, they are risking prosecution. An insurance fraud prevention organization in Pennsylvania conducted a study regarding insurance fraud and found the following:
- Most people don’t understand the basics of insurance fraud. Only one in six respondents knew how insurance fraud is defined and classified, and even fewer knew that it was a felony.
- Many respondents didn’t consider it to be a serious crime and weren’t aware of the jail time involved.
- Most respondents believed that those who participate in insurance fraud are rarely caught.
In fact, insurance fraud can lead to several years in prison and over $10,000 in fines, not to mention lawyer’s fees, court costs, and restitution. Insurance fraud is a felony that remains on your record for life and can interfere with finding employment or housing.
Insurance fraud is currently a drain on the industry and involved communities, and it’s only predicted to get worse as weather-related events increase. That’s why it’s important to prevent further damage in the future by proactively managing the risk.
Property claims services are the best way of reducing fraudulent costs and keeping insurance policy premiums at an affordable price for all. Contact Action Claim Service today to find out what we can do for you!