Insurance Fraud is a Felony

9 Although the incidents of insurance fraud are frequent and far reaching, its effect on the lives of the general public is seldom recognized. Some of the effects of insurance fraud in California are: • Insurance fraud totals over $15 billion each year. This costs each resident an average of $500 a year. This results in higher premiums, higher taxes, and higher prices. • According to the National Insurance Crime Bureau (NICB), other than tax evasion, insurance fraud is the second most costly crime in the country. • Insurance fraud has a direct effect on innocent, law-abiding citizens. Fraud perpetrators have staged automobile collisions resulting in loss of life, have driven companies out of business, and have performed inappropriate medical treatment on defenseless victims. • Criminals often target vulnerable groups that include seniors, recent immigrants, and small businesses. • Many residents do not think about the personal, moral, and economic threat that insurance fraud poses to their everyday lives and their standard of living. This leads to the growing tolerance of insurance fraud. People who commit insurance fraud range from first time opportunists to organized criminal rings who conspire to steal millions of dollars from insurance companies and consumers, to professionals and technicians who inflate the cost of services or charge for services not rendered; to ordinary people who want to cover their deductible or view filing a claim as an opportunity to make a little money. All lines of insurance are susceptible to fraud, but it is particularly prevalent in automobile insurance, healthcare, and workers’ compensation. Insurance Fraud Costs Consumers