n 2012, the Michigan Insurance Fraud Awareness Coalition took a survey and discovered 1 in 6 Michigan residents knows someone who has committed insurance fraud. Insurance fraud is when an individual commits an act with the intent of obtaining income from an insurance process, fraudulently. This occurs when the person making the claim is doing so to attempt some type of benefit or advantage they are not entitled to.

Types of Fraud

There are different types of insurance fraud committed every day. The 10 most common include reporting a stolen car; car accident; car damage; health insurance billing; unnecessary medical procedures; staged home fires; storm fraud; abandoned house fire; faked death; and renter’s insurance. Many do not realize that when insurance fraud is committed, they are taking money away from insurance companies and those who are honest about their claims end up having to pay higher premiums to cover the cost. It is estimated more than $30 billion per year is lost due to insurance fraud.

What’s the Penalty?

1 of every 10 insurance claims made is fraudulent. In Michigan, anyone who caught committing insurance fraud faces a felony, up to 4 years in prison, and a fine up to $50,000. Civil penalties may include losing a business losing their business license. Insurance fraud cases are handled under Michigan’s penal laws and my be pursued at a Federal level if necessary.

How Can I Help?

There are different ways Michigan residents can help fight against insurance fraud.

  • Report any accident and loss. If you are involved in a car accident or witness one, report it directly to the authorities
  • Keep accurate records of everything including what happened, names of those involved, address, telephone numbers, and names of witnesses
  • Be alert to possible fraud schemes. If you think someone is trying to involve you in a scheme make sure to contact police
  • If you believe someone is committing insurance fraud, report it ASAP.

I’m a Victim

If you or someone you know has been a victim of insurance fraud, there are multiple resources you can reach out to. The Michigan Insurance Fraud Awareness Coalition works hard to fight insurance fraud. Their website provides information of how residents are committing insurance fraud and what they are trying to do to stop it. Below are a list of numbers you can contact if you have been victimized of insurance fraud

Michigan Fraud Awareness Coalition 517-371-2880

Michigan State Attorney General 877-765-8388

National Insurance Crime Bureau 1-800-835-6422


Here at Compass Insurance we want to make sure our clients are highly informed and their insurance needs met. Any time you have questions or concerns, we encourage you to call our office and talk to one of our agents! It’s never too late to start asking questions.