In Pennsylvania‚ this type of dishonest act is classified among the most serious of crimes — it’s considered a felony. Those convicted of the crime face prison time‚ fines‚ legal fees and more — not to mention a wide range of negative personal and professional consequences.

Despite the severity of this crime, a statewide research study conducted in Pennsylvania in December 2008 found that most Pennsylvanians didn’t fully understand the acts that constitute insurance fraud.1 Since the launch of a new campaign to educate Pennsylvanians about the risks and penalties of insurance fraud, a follow-up study conducted in December 2010 has shown the number of Pennsylvanians who take the crime seriously has increased by 33%.2 A 2013 study shows that this awareness level has increased by 58 percent since the initial baseline study.3

Committing Insurance Fraud

Most people view insurance as a type of “security blanket” that can protect them against financial burdens associated with property loss‚ accidents‚ or injuries. Those who commit insurance fraud undermine the positive aspects of insurance by taking advantage of opportunities to lie in an attempt to receive undeserved money from their policies.

How do they do it? Some provide false information on an insurance application form to secure a lower policy premium than had they been honest. Others exaggerate the amount of loss on a claim they submit in order to receive a settlement for more than the fair value. Or they “stage” accidents and attempt to get money for injuries that never occurred.

The truth is‚ there are many ways ill-intended people try to cheat on their insurance coverage (see some of the examples listed on Types of Insurance Fraud). That’s why it’s a good idea to become familiar with how to avoid making a bad judgment call when faced with similar situations.