Insurance Fraud Prevention and Compliance

Key Takeaways

• Hard fraud (arson, staged losses) is a felony; soft fraud (exaggeration, misrepresentation) is also criminal.
• Material misrepresentations on applications can void policies retroactively, eliminating both claims and premiums.
• Legitimate claims optimization (multiple estimates, public adjusters, appraisal clause) is distinct from fraud.
• Annual property documentation and contemporaneous loss recording demonstrate good faith and support legitimate claims.