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Combating insurance fraud requires understanding the psychological factors that drive consumers to engage in fraudulent activity. The new Coalition Against Insurance Fraud’s study provides important insights into these factors, such as the perceived likelihood of being caught and the perceived severity of the consequences of committing insurance fraud.

The studyWho Me? Who Commits Insurance Fraud and Whyanalyzes how American consumers view insurance fraud and insurance crime and delves into the psychology of insurance fraud to understand the motivations and justification for the crime derived from in-depth interviews with those convicted of insurance fraud.

A significant number of Americans aged 45 and younger show a high level of tolerance for insurance fraud – even feeling envious of those who commit it – according to a new survey of insurance consumers by Verisk and the Coalition Against Insurance Fraud.

The study found that 87-96% of older respondents consider insurance fraud a crime, while only 75% of those under age 45 consider it a crime, with the percentage skewing downward by age to only 64% for the youngest group.

Other findings include:

– – More than 36% of all Americans believe it’s acceptable to submit an inflated auto damage claim
– – Over 30% of 25-34-year-olds “definitely would” submit a fraudulent property damage claim
– – 27% of those 18-24 would commit workers’ compensation fraud, compared to less than 10% of those 45 and older
– – Over a quarter of those 18-34 are “motivated” to commit insurance fraud compared to less than 7% of those over 45

Completing the “insurance fraud trifecta” the study also looked more closely at attitudes toward submitting a fraudulent workers compensation injury claim. Drawing from the combined overall responses, 5.71% of persons admitted to have already submitted a non-job injury to their employer to be paid. Based on the Coalition’s study in 2022 on Workers Compensation Fraud this alone could constitute nearly $1.5 billion each year of fraudulent workers compensation claim payments.

Others have not yet had the chance. Persons who say they “definitely would” submit such fake injury claims accounted for 11.36% of responses, even exceeding those who told us they “might” consider making such a claim at 10.50%. Collectively these groups accounted for 27.57% of all respondents, yet again representing a very high acceptance rate for the commission of insurance fraud in our nation across multiple lines of insurance, and even when doing so would involve not only lying to the insurance carrier, but also to your employer.

This study should sound the alarm for insurers, consumer activists, regulators, and legislators on the state of fraud in America. While it’s marginally reassuring that 84% of Americans in the survey consider insurance fraud a crime, the 16% that do not consider it a crime potentially represent more than 53 million Americans,” said Matthew Smith, executive director of the Coalition Against Insurance Fraud. “There is a need for consumer education on the harm insurance fraud crimes have on our economy and on every American citizen and family.”

Sadly, the change in societal attitude toward insurance fraud has been discovered in other surveys on other topics.

Several years ago, the Pew Memorial Trust released a report finding younger Americans to have “emerged into adulthood with low levels of social trust.” Pew noted, “The future of an ethical society is looking grim and we can expect even more fraud in the future.”

The recent book The Man Who Broke Capitalism cited a study by McKinsey finding 61% of current American CEOs would be willing to violate federal and state laws if necessary to meet quarterly financial reporting expectations of Wall Street investors.