What constitutes "insurance fraud"?

Insurance fraud is defined as an intentional deception made for personal gain regarding an insurance policy. Submitting false claims to receive insurance benefits falls squarely within this definition because it involves an individual deliberately misrepresenting information in order to obtain money or benefits that they are not entitled to. This act can take many forms, including inflating damage amounts, claiming losses that didn't occur, or even staging accidents.

The focus on dishonesty in the claim submission process highlights the critical legal and ethical standards required in the insurance industry. When someone files a claim based on false information, they undermine the integrity of the entire insurance system, which relies on trust and accurate representation from all parties involved. Such actions can lead to severe penalties, including criminal charges, loss of insurance licenses, and restitution of any wrongful gains.

In contrast, providing accurate information during policy applications, while necessary for maintaining truthful disclosure, does not constitute fraud but rather represents compliance with established requirements. Purchasing multiple policies for the same risk is often allowed under certain conditions, and filing a claim after a policy has lapsed typically does not involve any deceit intended for personal gain, as it is a matter of policy status rather than fraudulent intent.