How is 'insurance fraud' defined?

Insurance fraud is defined as an intentional deception made for personal gain by providing false information or claims. This definition emphasizes the element of intent, which distinguishes fraud from other types of issues that may arise in the insurance industry. It involves a deliberate act where an individual seeks to benefit unlawfully, often at the expense of an insurer. This might encompass activities such as fabricating damages, exaggerating claims, or providing misleading information to secure an undeserved payout.

Understanding this definition is crucial for professionals in the insurance industry, as identifying fraudulent behavior is vital for maintaining the integrity of the insurance process and protecting the interests of both the insurer and the policyholders. This contrasts sharply with situations involving errors in processing claims or disputes that may arise over legitimate claims, which do not involve the element of deceit.