What is Homeonwer's Insurance Fraud?

Fraudulent crimes are on the rise in the U.S., the U.K. and Canada.  This horrible fact is one that has accrued millions of dollars in debt for numerous corporations, financial institutions and consumers.  From credit card fraud to blatant identity theft, more people are finding themselves victim to an array of sophisticated and old fashion scams. 

Many of the scams commonly employed today evolve around insurance, be it automobile or medical related.  One variation of this crime that has recently received more attention is  homeowners' insurance fraud.  This occurs whenever an individual intentionally submits a false claim or fabricates a loss under an insurance policy that is for more than the actual loss endured.  By law, using false, misleading or incomplete information to support such a claim constitutes as fraud.  Some examples include submitting fraudulent receipts, home improvement estimates, legal depositions and even photos.  Additionally, helping another individual produce or prepare staged documentation to support a false claim makes you guilty of homeowners' insurance fraud.  Whether the insurance company pays the claim or not, this is a crime and you may be prosecuted to the full extent for your role. 

Types of Homeowners' Insurance Fraud

Staged Fires - This scam is not only unethical but very dangerous as well.  Many scam artists have been rewarded thousands of dollars for setting fire to their own homes.  In some cases, the insurance company will pay the remaining balance of the perpetrators mortgage but also any personal items that were damaged or lost in the blaze.  It's horrific to think some people would actually stoop to such a level to pull off a scam, yet hundreds of people are convicted for it every year. 

Vandalism - Here is another form of homeowners' insurance that lacks morals.  A con artist stages a break in and pays one or more people to make an intrusion.  The participates follow suit and destroy several precious items; items covered by the victim's insurance company.  To the authorities, the crime scene appears to be a typical case of "home evasion" or "breaking and entering".  Meanwhile, the con artist receives a hefty insurance check and payoffs the perpetrators for their role in the scam. 

How You Can Help

Though most homeowners' insurance claims are filed for genuine losses, a few of them are used as an opportunity for financial gain.  If you suffer losses by way of theft, physical incident or fire, immediately contact your agent and get every cent entitled to you under the policy.  Be sure to provide only the documentation that you have in your possession; materials that can be verified.  You should always refrain from creating false documentation whether the insurance company asks to verify it or not.  Additionally, you can analyze all of your insurance statements to ensure that your policy is up to date and accurate. 

Anyone asking you to participate in homeowners' insurance fraud is someone you want to stay away from.  What may seem like a friendly favor is actually anything but.  Remember this: in a few states, homeowners' insurance fraud warrants a felony conviction, a factor that could put you behind bars for a long time.