WHO DOES FRAUD HURT?

What You Should Know About Insurance Fraud

Insurance Fraud Costs You Money
Insurance fraud isn’t a victimless crime. When false claims, staged accidents, organized rings or inflated bills enter the system, those costs are built into premiums. Intentional inaccuracies on applications or claims contribute to higher costs for everyone.

Staged Accidents Are Real and Dangerous
Criminal rings cause crashes—often sudden rear-end collisions—to file fraudulent injury claims. These schemes can put unsuspecting drivers at serious risk as they threaten safety on roadways.

Some Consumers Are More Likely to Be Targeted
Fraud schemes often target people who may be less familiar with the insurance system or who feel pressure after an accident. Those most at risk can include:

• Young or new drivers who may not recognize red flags
• Older adults who may be pressured into signing documents
• Recent immigrants who have not yet found employment
• First-time policyholders unfamiliar with how claims work
• Drivers in high-traffic or densely populated areas where staged accidents are more common
• Small business owners who may be targeted by inflated liability claims

Scammers often look for confusion, urgency, or vulnerability. Being informed is one of the best protections.

Fraud Comes in Many Forms
Fraud isn’t just about car accidents. It can include:

• Inflated repair or medical bills
• Fake injury claims
• Property damage exaggeration
• False information on applications
• Contractors or service providers billing for work not performed

Consumers can be targeted—or unknowingly pulled into schemes.

Insurance Fraud Hurts More Than Your Wallet
Insurance fraud doesn’t just increase premiums—it can also diminish the quality of healthcare.

When fraudulent medical billing, unnecessary procedures, or staged injury claims enter the system, they divert time, resources and medical attention away from patients who truly need care.

In some cases, individuals involved in staged accident schemes are pressured into undergoing unnecessary tests or even invasive procedures solely to support inflated claims.

This strains healthcare providers, drives up medical costs and undermines trust in the system.

You Can Help Prevent Fraud
Consumers are often the first line of defense. You can:

• Verify service providers
• Review medical and repair bills carefully
• Be cautious of unsolicited legal or medical referrals
• Report suspicious activity to your insurer or the National Insurance Crime Bureau (NICB)
• For state-specific fraud reporting in New York, the New York State Department of Financial Services (DFS) maintains its own fraud reporting system with a hotline (1-888-FRAUDNY) and online forms.