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Who Commits Insurance Fraud, part 1: “But is insurance fraud even a crime?”

Everyone in our industry knows that insurance fraud is a serious problem that costs Americans more than $308 billion annually. But does that awareness extend to the people who purchase insurance policies? Possibly not.

A recent study Verisk conducted jointly with the Coalition Against Insurance Fraud delved deep into public perceptions and attitudes toward insurance fraud. The results were both reassuring and concerning, shedding light on the prevalence of certain beliefs.

To serve the diverse marketplace, insurers need to strive for AI that is fair, safe, and transparent.

We’ll be exploring the study’s results in this series, starting with its key question: “Do you consider insurance fraud to be a crime?” We placed this question near the end of the study, hoping to encourage participants to reflect on the broader societal implications and personal consequences of fraud activities before regarding their criminality.

The perception of insurance fraud as a crime

The study posed 29 questions about insurance fraud to more than 1,500 people selected to match the demographic distribution of the United States. Respondents were screened to include only people responsible for purchasing insurance policies for themselves or their households, so the study represents the views of insurance customers.

Surprisingly, a significant proportion (84%) of respondents surveyed consider insurance fraud to be a crime. While this may initially seem like a very positive statistic, it bears further examination. Extrapolated to the current adult population of the United States, this result indicates that about 53 million people don’t view stealing from insurance companies as wrong or criminal. The fact that these respondents were all responsible for purchasing insurance only adds to the concern.

Understanding the justifications

To gain a deeper understanding of why some individuals hold such views, we analyzed the responses of the participants:

  • The most common justification for insurance fraud, cited by 8.8% of respondents, was “Insurance companies rip people off, so it’s fair.”
  • Also popular was the statement, “I pay them enough, it’s my money I’m getting back,” which garnered 3.2% of responses.
  • When combined, these two categories accounted for slightly more than 12% or nearly 40 million people nationwide.
  • Notably, 3.7% of respondents believed that stealing insurance money is not wrong or improper under any circumstances.

Age and attitudes toward insurance fraud

The analysis revealed a significant shift in attitudes toward insurance fraud based on age. More than 95% of people ages 55 and over recognized insurance fraud as a crime. Below 55, however, each younger demographic cohort regarded insurance fraud as less of a crime than their elders:

  • The proportion of respondents who considered insurance fraud to be a crime dropped by 12.2 percentage points between the 55-64 and 45-54 groups.
  • That proportion dropped a further 12.3 percentage points between 45-54 and 35-44.

The most concerning trend was observed among respondents under the age of 24 who are also insurance policyholders. Shockingly, 35.2% of them—more than one-third—didn’t believe that committing insurance fraud should be considered a crime.

Of particular concern is the justification given by nearly 20% of this age group: “Insurance companies rip off people so its fair.” While this could raise questions about the development of moral and ethical beliefs during the late teens and early twenties, it could also indicate an opportunity for insurance companies to showcase the value they bring to their customers’ lives, proving the rip-off belief false.

The willingness to commit insurance fraud

Even more disconcerting than the belief that insurance fraud isn’t a crime is a willingness to act upon those sentiments and actively participate in fraudulent activities. A significant number of Americans admit to being motivated or envious of others who have engaged in insurance fraud. We’ll explore how many respondents indicated a willingness to commit fraud and the activities they’d be willing to do in the next article in this series.

The study’s findings highlight the complex issue of insurance fraud and its criminality. While most Americans recognize insurance fraud as a crime, a considerable number still hold opposing views. It’s essential to address these perceptions, educate individuals about the consequences of insurance fraud, and foster a sense of ethical responsibility in insurance transactions. By promoting awareness and integrity, we can work towards a future where insurance fraud is universally seen as a crime and discouraged by all ages and demographics.

With insurance fraud so widespread—and rationalized—identifying and fighting it has never been more crucial. Learn how ClaimSearch leverages over 1.7 billion claims to detect insurance fraud.

Statistics used in this article were pulled from the “Who, Me?” study conducted jointly by Verisk and the Coalition Against Insurance Fraud.

Interested in learning more? Watch the videos and gain insight into the perceptions respondents have on committing insurance fraud.

1. Are you affected by fraud?

2. Motivation to commit fraud

3. Auto damage results

Catch up on the full series here:

1. Who Commits Insurance Fraud, part 2: What motivates insurance fraud

2. Who Commits Insurance Fraud, part 3: Which generation is most likely to commit fraud

Learn how ClaimSearch leverages over 1.7 billion claims to detect insurance fraud.

Tom Donahue

Tom Donahue is the Vice President of SIU Engagement. As Vice President of SIU Engagement for the Verisk Claims Solutions Group, Tom leads our SIU industry relations strategy, along with the planning and execution of the Insurance Fraud Management (IFM) Conference, advisory group meetings and other industry events. You can contact him at

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