Hard Vs. Soft Fraud
Insurance fraud can be classified as either hard fraud or soft fraud.
Hard fraud occurs when someone deliberately plans or invents a loss, such as a collision, auto theft, or fire that is covered by their insurance policy in order to receive payment for damages. Criminal rings are sometimes involved in hard fraud schemes that can steal millions of dollars.
Soft fraud, which is far more common than hard fraud, is sometimes also referred to as opportunistic fraud. This type of fraud consists of policyholders exaggerating otherwise legitimate claims. For example, when involved in a collision an insured person might claim more damage than was really done to his or her car. Soft fraud can also occur when, while obtaining a new insurance policy, an individual misreports previous or existing conditions in order to obtain a lower premium on their insurance policy.
Read more about this topic: Insurance Fraud
Famous quotes containing the words hard, soft and/or fraud:
“The solar system has no anxiety about its reputation, and the credit of truth and honesty is as safe; nor have I any fear that a skeptical bias can be given by leaning hard on the sides of fate, of practical power, or of trade, which the doctrine of Faith cannot down-weigh.”
—Ralph Waldo Emerson (1803–1882)
“Even the most incompetent English actor, coming on the stage briefly to announce the presence below of Lord and Lady Ditherege, gives forth a sound so soft and dulcet as almost to be a bar of music. But sometimes that is all there is. The words are lost in the graceful sweep of the notes.”
—Robert Benchley (1889–1945)
“Things gained through unjust fraud are never secure.”
—Sophocles (497–406/5 B.C.)