Entrepreneur Plus - Short White
For Subscribers

Honesty Pays Insurance fraud is not only a crime-it's costly, too.

By Jacquelyn Lynn

Opinions expressed by Entrepreneur contributors are their own.

It might not seem serious if you fudge your insuranceapplication to get a lower premium or inflate the value of a claimto cover your deductible. But if you're not entirely truthfulwith your insurance company, you're committing fraud.

Claire Wilkinson, vice president of global issues for theInsurance InformationInstitute in New York City, says property and casualtyinsurance fraud cost insurers about $30 billion in 2004. Aside fromblatant fraud, like submitting claims for damage that neveroccurred or staging accidents, common frauds include"padding," or inflating claims, and misrepresenting factson an insurance application. Another common fraud happens whenemployers underreport the number of workers they have ormisclassify employees to save on workers' compensationpremiums. "When companies underpay workers' comp, itdrives up premiums for every other business and shifts the burdenfor worker-related injuries to employers who report honestly,"says Wilkinson.

This is a subscriber-only article. Join Entrepreneur+ today for access

Editor's Pick

Related Topics

Starting a Business

Its First Year, This Startup Struggled to Get 75 Clients. Five Years Later, They Have 18,000. Here's How They Did It.

Financial planning startup Facet knew they were targeting a huge untapped market. But getting clients wasn't as easy as they hoped.

Buying / Investing in Business

Get Better at Real Estate Investing with Mashvisor — on Sale for Just $39.99

A lifetime subscription regularly costs $899.


There's a Scientific Reason You Can't Stop Thinking About Unfinished Tasks. Learning to Harness That Energy Will Make You More Productive.

Why unfinished work captures our attention more than finished tasks, and how to leverage that psychological tendency for both personal and professional betterment.


Master Time Management by Using These Essential Tips for Self-Employed Entrepreneurs

These key time management tips have not only helped me stay afloat amidst the chaos but have bolstered my business and reputation.

Growing a Business

5 Surefire Ways to Grow Your Remote Business

Many people dream of having their own business, and today, that dream often extends to doing so remotely. But what does it take to make that dream a reality?


Franchise Legalese Defined — A Deep Dive Into Franchising Definitions

Before you can decide if you should franchise, find out exactly what you're getting yourself into.