Insurance fraud takes more than $300 billion from American consumers each year.[1] Much of this amount comes from smaller and sometimes opportunistic scams. However, even small scams can add up to big amounts. For example, in the case of a big disaster such as the record-breaking Hurricane Katrina. Of the $80 billion in government funding that was provided to rebuild after the storm, an estimated $6 billion might have gone to fraudulent claims.[2]
Insurance fraud is a crime that occurs when someone intentionally provides false information or misrepresents facts to an insurance company for material gain. Some examples include:
- Exaggerating claims
- Staging accidents
- Using someone else’s identity (such as for healthcare benefits)
- Intentionally causing a property loss (such as arson)
- Life insurance claims under suspicious circumstances
But for all the petty crimes and blurring of the truth, there are some pretty crazy cases of fraud that have rocked the insurance world and make you wonder how these criminals thought they could get away with it. Here’s our top picks for the five craziest insurance fraud stories.