Insurance fraud is any material misrepresentation to an insurance company made by a person claiming insurance benefits or applying for an insurance policy.
Most insurance frauds are felonies. If the amount of money involved is more than $1000 the crime is a class A felony punishable by up to 15 years in prison. If the amount is more than $500 but less than $1000, the crime is a class B felony punishable by up to 7 years in prison. Any insurance fraud involving less than $500 can result in incarceration for 12 months.
Insurance fraud is committed by people from all walks of life and in all occupations.
Workers' Compensation Claimant Fraud: The workers' compensation system exists to provide people legitimately injured in the workplace with a guaranteed source of income until they are able to recover. Most people injured on the job return to work as soon as they are able. Unfortunately, others attempt to "double-dip" by obtaining another job while continuing to collect workers' compensation insurance benefits. This drives up the insurance premiums for employers and causes lost employment opportunities for other, honest workers trying to make a living.
Workers' Compensation Premium Fraud: Almost all employers are required to purchase workers' compensation insurance to cover their employees. The cost of this insurance is called the "premium." The premium the employer must pay is calculated by a complex formula that assesses how much the employer pays his employees, what kind of work they do, and whether the employer has shown a history of having a safe workplace. Not surprisingly, jobs where workers are likely to get hurt are more expensive to insure than others. Sometimes the employer may lie about the occupation of his employees to get a lower premium. The employer may also pay a portion of his employees' wages "under the table" to get a lower premium.
Arson: Sometimes people burn buildings, cars or other property in order to collect insurance proceeds. In addition to insurance fraud, arson carries additional penalties. Also, if someone is injured or killed as a result of arson, the perpetrator can be tried for assault or murder.
Medical Provider Billing Fraud: Some healthcare providers, including doctors, dentists, nurses, chiropractors, psychiatrists, pharmacists, physical therapists, and others, may attempt to defraud insurance companies by submitting bills for procedures that were never performed, or "upcode" by charging an insurer for a procedure that is more expensive than the one they actually performed.
False Vehicle Registration: Some people register their vehicles in New Hampshire because our auto insurance rates are lower than in some surrounding states. This act is a crime and it could also lead the insurance company denying a claim in the event of an accident. New Hampshire residents buying auto insurance end up paying for this practice because it increases our local premiums.
Staged Accident "Rings": Insurance fraud can be a sophisticated enterprise. In some areas, police and prosecutors have uncovered widespread organizations involving lawyers, doctors, and "runners" who stage car accidents and then sue insurance companies.
These examples are only the "tip of the iceberg." Criminals constantly try to stay one step ahead of law enforcement and the insurance industry by inventing new ways to commit fraud. All insurance fraud crimes have one thing in common: In the end, we all pay.
The efforts of the Attorney General and law enforcement, the Insurance Fraud Unit, and the insurance industry cannot succeed without your help. If you suspect insurance fraud, contact:
The New Hampshire Insurance Department
Insurance Fraud Unit
The National Insurance Crime Bureau
The National Insurance Crime Bureau offers rewards of up to $1000 for information leading to an insurance fraud conviction.
To learn more about insurance fraud, you can visit the following sites:
New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301