Motive for fraud: desperation or calculation?

Claims, May, 2004 by Wilson, Randall

Financial motives in insurance fraud cases often stem from either desperate circumstances or careful calculation. Understanding the characteristics of each can make a difference in identifying the forces driving claimants to commit fraud.

Property and casualty insurance fraud cost insurers $27 billion in 2001, according to the Insurance Information Institute. This figure accounts for approximately 10 percent of the p/c industry's total underwritten premium. Insurance fraud is committed by parries at every corner of the insurance transaction, including policyholders, third-party claimants, and professionals who provide services to claimants and policyholders.

One major type of insurance fraud that affects the p/c industry is arson for profit. The...

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