What Is Insurance Fraud? | Attorney General - State of Colorado

What Is Insurance Fraud?

Insurance Files

Insurance Fraud is highly diverse and occurs in all categories of insurance.  The fraud can range in severity from slight exaggeration or “padding” of claims to wholesale fabrication of claims, events, and conditions.  Fraud prosecuted by the Colorado Attorney General’s Office frequently includes false claims for property damage, staged automobile accidents, false medical claims, and workers’ compensation fraud.

One highly affected area of insurance is the automobile insurance industry.  Types of automobile related insurance fraud include false claims for fabricated or exaggerated injuries, false reports of automobile theft, and claims of pre-existing damage to a car.  A commonly used insurance fraud scheme involves staging car accidents and then fabricating injuries to submit claims for medical treatment.

Common homeowner’s insurance policies are also exploited when policy holders falsely report stolen items, intentionally damage property, and inflate the value of stolen items or submit falsified receipts.  A highly dangerous example is arson for profit, where a homeowner sets fire to their own house in order to make money or pay-off a mortgage which they can no longer afford.  Such behavior risks injury to many including innocent neighbors, bystanders and emergency personnel. 

Workers’ compensation fraud includes staging accidents at work to obtain coverage for a pre-existing injury, working while collecting workers’ compensation benefits, as well as exaggerating injuries for prolonged treatment and payment of temporary disability benefits.

Insurance fraud also includes misconduct by insurance agents and providers, such as stealing insurance premiums and issuing fake certificates of liability insurance.  In these types of cases, the Colorado Attorney General’s Office works closely with the Colorado Division of Insurance to prosecute and regulate industry providers.

If you believe you have witnessed, been victimized by insurance fraud, or wish to report suspicious activity, please file a report here.