Fraud is a type of theft that focuses on the deception of innocent parties, typically for financial gain. Fraud can be perpetrated on individuals as well as on entities such as corporations and government agencies.

In the context of insurance, fraud is most often the filing of a false claim to obtain undeserved compensation. Statutes have made insurance fraud a crime, punishable by fine and/or imprisonment.

Medical Insurance Fraud
Medical insurance fraud usually consists of filing a false claim or filing several claims for the same injury, intending to receive payment for a loss, or claimed loss.

Additionally, health care practitioners sometimes commit insurance fraud by submitting false claims to insurance companies to receive payment for services that were either not performed or were already paid. Punishment for this type of fraud can typically range from 2 to 4 years, usually, along with a hefty fine. Also, the amount involved in the fraud typically affects the punishment.

Automobile Insurance Fraud
Automobile insurance fraud is a huge factor leading to insurance rates increases. This crime usually consists of a person purposely crashing a car or submitting false information to obtain payment for a loss covered under the insurance policy.

As in medical insurance fraud cases, the punishment for this crime can include imprisonment as well as a fine.