Legal Definitions - fraudulent claim

A fraudulent claim refers to a deliberate misrepresentation or fabrication of facts submitted to an insurance company or similar entity with the specific intent to deceive and obtain money or benefits that one is not legitimately entitled to. It involves knowingly providing false information or concealing crucial facts to gain an unfair advantage or unjust enrichment.

Here are some examples illustrating a fraudulent claim:

• Example 1: Auto Insurance Fraud

  Scenario: A car owner, facing financial difficulties, intentionally sets fire to their old vehicle in a remote location and then reports to their auto insurance company that the car was stolen and subsequently found burned. They then file a claim for the full market value of the vehicle.

  Explanation: This is a fraudulent claim because the owner deliberately destroyed their own property and then fabricated a false story about theft to their insurer. Their intent was to deceive the insurance company into paying out for a loss that was intentionally caused by the policyholder, rather than an accidental or covered event.

• Example 2: Health Insurance or Workers' Compensation Fraud

  Scenario: An employee claims a severe back injury occurred at work, stating they are completely incapacitated and unable to perform any job duties, leading them to file for extensive workers' compensation benefits and long-term disability. However, investigators later discover social media posts and witness accounts showing the employee actively participating in strenuous recreational activities, such as hiking and competitive sports, during the period they claimed total disability.

  Explanation: This constitutes a fraudulent claim because the employee knowingly exaggerated the extent of their injury and incapacity, providing false information to the insurer to receive disability payments and medical coverage they were not genuinely entitled to based on their actual physical condition and activities.

• Example 3: Property Insurance Fraud

  Scenario: A homeowner, planning to upgrade their kitchen, removes all their existing appliances and cabinets, stores them in a separate location, and then reports to their homeowner's insurance company that their home was burglarized, and all kitchen fixtures and appliances were stolen. They then submit a claim for the replacement cost of these items.

  Explanation: This is a fraudulent claim because the homeowner intentionally fabricated the theft of items they had merely relocated. By providing false information about a non-existent burglary and submitting a claim for items that were not stolen, they intended to deceive the insurance company into funding their kitchen renovation.