Last Updated: July 30, 2024
What is Insurance Fraud?
Fraud is the intent to deceive an entity or a person for the purpose of financial gain.
Insurance Fraud is when a person or entity deceives an insurance company or a person into:
Paying an insurance claim that the person or entity is not entitled to receive,
Providing insurance coverage that the person or entity is not entitled to receive, or
Billing a lower insurance premium rate than the person or entity is entitled to receive.
Who Perpetrates Insurance Fraud?
Fraudulent Insurance Acts are defined in
Wis. Stat. §601.41(12)
. They can be perpetrated by many different actors and may incorporate a number of criminal acts. Insurance fraud occurs with all kinds of insurance, including auto, homeowners, workers' compensation, and health care. It ranges from large scale organized crime to individual wrongdoing.
Insurance fraud can be perpetrated by someone who deliberately fakes an accident, injury, theft, arson or other loss to collect money illegally from insurance companies, or it can be perpetrated by normally honest people when they tell “little white lies" to their insurance company.
Contractors, doctors, chiropractors, lawyers or others in positions of trust may perpetrate insurance fraud when they submit artificially inflated invoices or invoices for services that were not rendered to the insured, for payment by insurance companies.
It can also be perpetrated by persons, entities, and even licensed insurance agents, if they deceive insurance companies on insurance applications or audits so that the insured either receives coverage that they would not be entitled to without the deceit, or lower rates than they would be billed had they been truthful in their application or subsequent reporting.
The Impact of Insurance Fraud
Insurance fraud raises everyone's insurance costs because the insurance companies pass those losses on to consumers in the form of increased premiums. The most recent estimate of the cost of insurance fraud in the U.S. by the Coalition of Insurance Fraud is $308.6 billion across all lines of insurance. It is estimated that insurance fraud costs the average U.S. family between $750 and $1,000 per year in the form of increased premiums.
Reporting Insurance Fraud
Allegations of insurance fraud can be investigated by the Office of the Commissioner of Insurance and addressed administratively via Wis. Stat. §601.41(12), and criminal conduct perpetrated in the fraudulent insurance acts can be referred for criminal prosecution by local District Attorneys or the Department of Justice.
You can report insurance fraud using the online portal, which will collect all the information we need to begin our investigation.
Report Insurance Fraud
You can also email the Commissioner's fraud unit to ask questions or share concerns at
ocifraud@wisconsin.gov.