Q:

What is an insurance fraud bureau?

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Quick Answer

Insurance fraud bureaus are state agencies tasked with preventing, unearthing and investigating insurance crimes, notes the Coalition Against Insurance Fraud. There are state insurance fraud bureaus in 41 states and the District of Columbia, as of 2015.

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Full Answer

Most state insurance fraud bureaus protect consumers from all types of insurance scams, though some specialize in certain types of fraud, such as auto insurance or workers' compensation, states the Coalition Against Insurance Fraud. Insurance fraud bureaus combat hard fraud, in which someone steals a large sum from an insurance company through deceit, such as by setting fire to his own home and claiming it was an accident. They also investigate soft fraud, which occurs when people lie to insurance companies to obtain smaller claims, such as by inflating the value of items taken during burglaries.

In cases of suspected fraud, people should contact state insurance fraud bureaus, as insurance crimes cost consumers and businesses in both direct costs and higher premiums and, in some cases, cause injuries and death, advises the Coalition Against Insurance Fraud. A person who has a good faith claims dispute with his insurance company should not contact his state insurance fraud bureau. He should contact the company's customer service department or state insurance department.

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