offered by

Identifying and Reporting Insurance Fraud

Protect Yourself from Insurance Fraud

Printer Friendly version 

Insurance fraud affects everyone. Each year, companies and consumers alike suffer tens of billions of dollars in insurance fraud costs. Taking a shortcut when it comes to your insurance could prove catastrophic and costly. Selecting the cheapest policy available without first checking into the agent or company could potentially leave consumers without any legitimate coverage. If it seems too good to be true, it often is.

Insurance fraud occurs when an insurance company, agent, adjuster or consumer commits a deliberate deception in order to obtain an illegitimate gain. It can occur during the process of buying, using, selling or underwriting insurance.

Different Areas of Insurance Fraud and How to Identify Them

There are four major sources of insurance fraud: fake insurance companies, legitimate companies not licensed to sell insurance, individuals within the insurance industry and consumers. Below are brief descriptions of each source and ways to identify them.

Fake Insurance Companies Unlicensed Insurance Companies
Fake insurers collect premiums for false policies with no intention of paying claims. These illegitimate companies offer significantly lower premiums and are often difficult to reach by phone. Legitimate companies not licensed to sell insurance market their products - such as health discount plans - as "insurance." In reality, these are unregulated, non-insurance products.
Fraud by Individuals Fraud by Consumers
Individuals within the insurance industry can also be guilty of insurance fraud. For example, an agent may collect premiums from consumers without passing them on to the insurer. As a result of not receiving these payments, insurance companies cancel or do not renew the consumers' policies. Consumers also commit insurance fraud. Deliberate attempts to stage an accident, injury, theft or arson that would be covered under an insurance policy; exaggerating a legitimate claim; or providing false information are all examples of consumer insurance fraud.
Protect Yourself in Three Easy Steps

1 - Verify Before you Buy

If you are unsure about the insurance company or agent you are dealing with, remember to STOP, CALL & CONFIRM

STOP - before signing any paperwork or writing a check

CALL - that Massachusetts Division of Insurance at 617-521-7794

CONFIRM - that company or agent offering insurance is legitimate and licensed in Massachusetts

For additional help with your research, you can consult the National Association of Insurance Commissioners' (NAIC) Consumer Information Source to review the company's financial and claims history. To use this free resource, visit

2 - Watch for Hidden Fraud

Even if you purchase a legitimate product from a licensed insurance company, you should watch out for signs that an individual agent or employee might be committing fraud. Warning signs include the failure to receive a copy of your insurance policy in a timely manner. If you have questions or concerns, contact your company directly or call the Division of Insurance for assistance.

3 - Report Suspected Insurance Fraud

If you believe you may be a victim of insurance fraud, or if you are aware of an instance of insurance fraud, it is important to file a complaint with the Division of Insurance at or by calling 617-521-7794

The Insurance Fraud Bureau (IFB) of Massachusetts is the state's special fraud bureau. The IFB undertakes cases for investigation and preparation for criminal prosecution. To file a complaint with the IFB directly, visit their web site at Consumers can also contact the IFB hotline at 1-800-32FRAUD (1-800-323-7283).