Insurance Fraud Awareness Challenge

November 21, 2025
/
2025

Are you “insurance fraud aware”? Test your knowledge about a crime that affects everyone’s wallet! Choose the best answer to each question. Answers are provided at the end.

Section 1: The Basics

  1. What is the simplest definition of insurance fraud?
    1. Someone forgetting to pay their insurance premium.
    2. Someone lying or cheating to get money or benefits from an insurance company they’re not entitled to.
    3. An insurance company refusing to pay a legitimate claim.
    4. An honest mistake on an insurance form.
  2. True or False: Insurance fraud is a victimless crime.
    1. True.
    2. False.
  3. What is the main way insurance fraud impacts honest policyholders like you?
    1. It makes insurance companies go out of business.
    2. It directly leads to higher insurance premiums for everyone.
    3. It only affects people who have filed a claim.
    4. It has no direct impact on individual consumers.
  4. What are the two main categories of insurance fraud?
    1. Small fraud and large fraud.
    2. Individual fraud and company fraud.
    3. Soft fraud and hard fraud.
    4. Auto fraud and health fraud.
  5. Which type of fraud involves exaggerating an otherwise legitimate claim, or lying about small details on an application to get a lower premium?
    1. Hard fraud.
    2. Soft fraud.
    3. Premium fraud.
    4. Identity fraud.

Section 2: Types of Fraud in Action

  1. In an auto insurance fraud scam, what is a “swoop and squat”?
    1. When someone quickly swerves to avoid an animal and crashes.
    2. When a car suddenly cuts in front of you and slams on the brakes, causing a rear-end collision.
    3. When a tow truck quickly arrives at an accident scene.
    4. When a driver switches lanes without signaling.
  2. If a healthcare provider bills your insurance for a complex procedure you didn’t receive, but actually performed a simpler, less expensive one, what type of fraud is this called?
    1. Over-servicing.
    2. Upcoding.
    3. Under-billing.
    4. Kickback.
  3. True or False: If a contractor offers to “waive your deductible” and tells you they’ll just inflate the bill to your insurance company, it’s a perfectly legal way to save money.
    1. True.
    2. False.
  4. Which type of workers’ compensation fraud involves an employer lying about the type of work their employees do or underreporting payroll to pay lower premiums?
    1. Claims fraud.
    2. Premium fraud.
    3. Injury fraud.
    4. Provider fraud.
  5. What is a “jump-in” scam in auto insurance fraud?
    1. When someone jumps out of a moving car.
    2. When someone who wasn’t in the car during an accident claims to have been, seeking injury payouts.
    3. When a car jumps a curb during an accident.
    4. When an insurance claim is filed quickly.
  6. In homeowners insurance fraud, what is “arson-for-profit”?
    1. Accidentally setting a fire and then claiming damage.
    2. Intentionally setting fire to property to collect insurance money.
    3. A fire caused by faulty wiring.
    4. Burning old documents for fun.

Section 3: The Impact and Reporting

  1. According to recent estimates, approximately how much does insurance fraud cost the U.S. economy annually?
    1. $100 billion.
    2. Around $50 billion.
    3. Over $300 billion.
    4. Less than $1 billion.
  2. If you suspect insurance fraud, you should only contact your personal insurance agent, not any government agencies.
    1. True.
    2. False.
  3. What is a key action you should take if you suspect health insurance fraud after reviewing your Explanation of Benefits (EOB)?
    1. Immediately pay any suspicious bills.
    2. Ignore it, assuming it’s a mistake.
    3. Contact your insurance company’s fraud department.
    4. Call the police directly for every suspected instance.
  4. What is the primary motivation for most individuals and businesses to commit insurance fraud?
    1. To avoid paperwork.
    2. To protect their privacy.
    3. To gain illegitimate financial benefit.
    4. To make the insurance company look bad.

Answers

  • b) Someone lying or cheating to get money or benefits from an insurance company they’re not entitled to.
  • b) False. (It costs everyone through higher premiums and other negative impacts.)
  • b) It directly leads to higher insurance premiums for everyone.
  • c) Soft fraud and hard fraud.
  • b) Soft fraud.
  • b) When a car suddenly cuts in front of you and slams on the brakes, causing a rear-end collision.
  • b) Upcoding.
  • b) False. (This is illegal and a form of fraud.)
  • b) Premium fraud.
  • b) When someone who wasn’t in the car during an accident claims to have been, seeking injury payouts.
  • b) Intentionally setting fire to property to collect insurance money.
  • c) Over $300 billion.
  • b) False. (You should also consider contacting your state’s Department of Insurance or national anti-fraud organizations.)
  • c) Contact your insurance company’s fraud department.
  • c) To gain illegitimate financial benefit.

How did you score?

  • 0-7: Great start. Take time to learn more. Visit insurancefraud.org for more educational resources.
  • 8-13: You’re getting there! Understanding about insurance fraud is making you more aware – and THAT is keeping you protected!
  • 14-15: You’ve got it! Don’t stop learning. Insurance fraud is evolving. Just when we think we know the answers, the fraudsters “up” the game.