Fraud Stats


  • Insurance fraud steals at least $80 billion every year from American consumers. (Coalition Against Insurance Fraud is working to update this figure in 2022).
  • Fraud occurs in about 10% of property-casualty insurance losses.
  • Medicare fraud is estimated to cost $60 billion every year. (AARP 2018)
  • Want the big picture? These infographics illustrate the impact of insurance frauds.

By Category

Consumer Attitudes

78% say they are concerned about insurance fraud.

State Laws

48 states make insurance fraud a specific crime.


8,500 cars were intentionally set on fire in 2018.

Workers Compensation

12.4% – 20.5% of construction workers were misclassified in 2018.

Healthcare Fraud

$3.1 billion in false and fraudulent claims in 2020.


21% of insurance plan to invest in AI in the next two years.

Most consumers are concerned about insurance fraud. Americans also show increasing tolerance for specific forms of unethical insurance behavior:

  • 78% percent say they are concerned about insurance fraud.
  • 88% say it’s unethical to misrepresent a claim to obtain payment for an uncovered loss, compared to 93% in 1997.
  • 84% say submitting an inflated claim is unethical, compared to 91% in 1997.

Six of 10 Americans believe crime is higher than the year before, say 18 of 22 Gallup surveys between 1993 and 2018. Despite the generally downward trend in national violent and property crime rates during most of the same period.

(Gallup surveys, 2019)

Older Americans are less tolerant than younger consumers:

  • 81% of Americans over 55 say premium evasion is unethical, compared to 68% of Americans under 35 years.

How people justify insurance fraud:

  • High premiums (70%).
  • Too much insurer profit (63%).

(Coalition Against Insurance Fraud, 2017)

  • Consumers in their 20s and 30s are 25% more likely to report losing money to fraud than people 40 and over.
  • Millennials are 77% more likely than other age groups to say they lost money to a scam that started with an email.
  • Millennials are less likely to report losing money to scams starting with a phone call.

(Federal Trade Commission, October 2019)

Older Americans exploited by fraud in recent years suffered an average loss of $34,200.

Reports of suspicious financial activity involving seniors totaled $1.7 billion. There were 63,500 reports that year, four times as many as in 2013.

Outside analysts looking at elder fraud have separately estimated losses of $2.9 billion-$36.5 billion a year.

(Consumer Finance Protection Bureau, February 2019)

  • 48 states make insurance fraud a specific crime. 30 states make insurer fraud a specific insurance crime. Oregon is the only state without an insurance fraud law of any kind.
  • 42 states and the District of Columbia have an insurance fraud bureau. Most deal with all lines of insurance.
  • 43 states and the District of Columbia require insurers to report suspected fraud to the state fraud bureau or other agency.
  • 22 states have enacted laws making counterfeit airbags a specific crime.

(Coalition Against Insurance Fraud, March 2020)

  • Corporate and white-collar prosecutions are at an all-time low. This raises questions about how hard federal prosecutors pursue complex, organized insurance schemes.
  • Only 359 defendants overall were prosecuted in January 2020. Almost all were individuals rather than businesses.
  • Prosecutions in January 2020 were down 25% from just 5 years ago.
  • Federal white-collar prosecutions also fell from their peak of over 1,000 in June 2010 and February 2011. They reached over 10,000 in FY 2011.
  • If prosecutions continue at the same pace for the rest of FY 2020, they’ll fall to 5,175 — almost half of their prior level.

(TracReports, March 2020)

Fraud plots are getting more complex, often involving multiple industries rather than solely insurance. An insurance investigation, for instance, might reveal evidence of financial fraud.

  • 84 percent of insurance organizations say fraud cases they investigate involve more than one industry.
  • 76 percent of cross-industry fraud cases have a moderate to high impact on insurance organizations.
  • More than half say these cases (61 percent) have severe impacts on responding insurance organizations.

Fraud schemes of high concern: identity theft (49 percent), hacking (45 percent), employee-agent (37 percent) and claims (34 percent). (LexisNexis, June 2016)

Most contractors are ethical and honest. Yet unlicensed and dishonest operators try to exploit often-traumatized homeowners after storms.

Contractors may demand large cash down payments, then disappear without doing work. Shoddy workmanship with substandard materials are other problems. Contractor schemes can cost homeowners thousands of dollars in uninsured bills.

  • Poor workmanship (50%) and fraud (36%) are a homeowner’s biggest concerns about hiring contractors.
  • Consumers are alert to these red flags of potential fraud: demands cash upfront (81%) … hesitates to provide proof of insurance (79 percent) … has no physical business location or permanent phone (73%) … and doesn’t sign a contract (70%).
  • More than half (56%) paid cash for their last home repair or improvement.

(HomeAdvisor, July 2013)

Auto glass claims

Fraudsters convince drivers they need a windshield repair or replacement when they don’t. Some glass firms bill for phantom windshield replacements, or replace undamaged windshields. Dishonest glass firms also convince consumers to sign an assignment of benefits (AOB) form. This gives the glass firm the legal right to file claims, make repairs and collect insurance payments. Firms are exploiting AOBs to inflate repair claims

  • 10% of the nation’s auto glass claims were in Arizona between 2015 and 2019.
  • More auto-glass claims are filed in Arizona than California or Texas, with populations 5.5 and 4 times larger.
  • Auto glass claims have increased 26% over the last 5 years in Arizona. This suggests a possible spike in fraud.

(National Insurance Crime Bureau, February 2020)

Auto coverage and injury scams

Staged-crash rings injure or kill innocent victims and fleece auto insurers out of billions of dollars a year. Usually these are bogus soft-tissue injuries such as sore backs or whiplash involving billing for unneeded treatment of phantom injuries.

Other frauds include false reporting of actual vehicle drivers, faking information on annual mileage driven, lying to get insurance coverage and claim vehicles are garaged in locations with cheaper insurance rates.

Auto insurers lose at least $29 billion a year to these scams. Consumers pay with losses amounting to 14 percent of all personal auto premiums. Among the sources of losses:

  • $10 billion (unrecognized drivers).
  • $5.4 billion (underestimated mileage).
  • $3.4 billion (violations/accidents).
  • $2.9 billion (false garaging to lower premiums).

(Verisk Analytics, March 2017)


10 Worst States for Auto-Related Fraud (Clearsurance, August 2021)

First responders risk their lives and even die fighting fires set to homes and businesses to collect insurance funds. During COVID-19 internet searches on “how do I burn my…” rose 125%. While tracking arson statistics is difficult, the trends show a need for concern and action:

In 2018, there were:

  • 22,500 intentionally set structure fires (13% increase over 2016).
  • $582 million in property losses (26% increase).
  • 8,500 intentionally set vehicle fires (11% decrease).

(National Fire Protection Association, October 2019)

In 2017, there were:

  • 33,660 arson offenses.
  • Nearly 4 of 5 arsons aren’t cleared.
  • $15,572 average damage.

(FBI, 2017)

Economic downturns often cause and increase in both commercial and residential arsons as owners seek to escape mortgages and expenses associated with a property they may not be able to sell. Here are some insights on home arson trends.

Tens of thousands of arsons go unreported annually. Many likely are insurance arsons.

  • Chicago reported 61 building arsons though it experienced at least 192.
  • Houston reported 25 intentional fires while having 224.
  • Indianapolis reported no arsons despite experiencing at least 216.
  • New York reported 11 arsons instead of 1,347 it really had.
  • Up to half of the 3,000 fire deaths each year should be treated as homicides.
  • Much of the $15.5 billion paid last year by insurers (and clients) should be contested because arson often involves fraud.

(Scripps News, November 2013)

  • Improper Medicare payments totaled $25.74 billion (6.27%) in FY 2020. That’s a drop from $28.91 (7.25%) in FY 2019. The decrease was driven by reductions of improper payment rates for home health and skilled nursing claims.
  • Home health: $5.9-billion decrease of improper payments (2016-2020) due to corrective actions.
  • Skilled nursing: $1-billion decrease of improper payments (2019-2020).

(Centers for Medicare & Medicaid Services, November 2020)


Treatment by excluded medical providers

  • Patients treated by healthcare professionals later excluded from the Medicare program for committing fraud and abuse are between 14%-17% more likely to die than patients treated by non-excluded physicians, nurses, and other professionals.
  • Patients treated by providers banned from Medicare for fraud and abuse are 11%-30% more likely to experience an emergency hospitalization.
  • Medical providers banned for fraud and abuse treat patients more likely to be low-income, non-white, and disabled.
  • Nearly one-quarter (23%) of patients seen by excluded providers are non-white while approximately 16.5% of patients treated by approved providers were non-white.

(Johns Hopkins Bloomberg School of Public Health, October 2019)

Surprise medical bills

    • Surprise medical bills impose large and often-unfair costs on patients for out-of-network expenses they thought their health plan covered. Surprise bills can border on fraudulently inflated. Out-of-network billing can also increase healthcare costs for patients who don’t receive balance bills. Many insurance plans require higher cost-sharing (deductibles, co-insurance, co-pays) for out-of-network care.

      • More than 10% of commercial healthcare spending is attributable to services for which surprise billing is common: services by radiologists, anesthesiologists, pathologists, emergency physicians, emergency ground ambulances and emergency outpatient facilities.
      • Eliminating provider leverage stemming from the ability to surprise-bill could reduce commercial insurance premiums by as much as 5.1%, or $212 per member per year. This could reduce aggregate premiums by approximately $38 billion for the nation’s commercially insured population.

(American Journal of Managed Care, September 2020)

  • 1 in 5 Americans who undergo elective surgery — or surgery they schedule in advance — incur unexpected out-of-network medical bills.
  • Patients who incurred surprise medical bills owe $2,011 more, on average. That’s in addition to the nearly $1,800 cost that average privately insured patients would owe to their insurer for elective surgery.


(Journal of the American Medical Association, February 2020)

Shady employers

Some businesses illegally try to avoid paying state-required workers compensation premiums by misclassifying employees as independent contractors. Typically such workers are paid off the books to hide the evidence.

Staff labor and payroll size are two key factors that workers-compensation insurers use to gauge premiums.

Misclassifying employees in high-risk jobs as holding lower-risk jobs is another ruse. A dishonest roofing firm tells high-risk roofers are lower-risk sales staff or clerks. Misclassifying is especially widespread in dangerous professions such as construction, where risky work means high workers-comp premiums.

Misclassifying illegally avoids taxes, wages and other expenses. Shady employers often prey on minority and immigrant communities especially. This crime gives employers an unfair advantage over competitors.

  • 12.4%-20.5% of U.S. construction workers were misclassified as independent contractors or working off the books in 2017.
  • 1.3 million-2.1 million workers were misclassified or doing cash-only work each month. Hiring seasonal workers increases these rates during peak employment.
  • Payroll scams meant employers paid only $38.2-$43.7 billion — saving $11.7 billion and $6.2 billion, respectively. Specific states and regions may differ.

(United Brotherhood of Carpenters, March 2020)

Dishonest employees

  • More than 1 in 10 small-business owners are concerned employees will fake an injury or illness, or claim non-work injuries occurred on the job.
  • Nearly one in four owners use surveillance cameras to monitor employees on the job.
  • One in five owners feel unsure how to identify workers-compensation scams.
  • More than half agree these are fraud flags: Employee has a history of claims (58%) … no witnesses to the incident (52%) … employee didn’t report the injury or illness in a timely manner (52%) … the injury coincides with a change in employment status (51%).

(Employers Holdings, July 2015)

Thieves frequently steal consumers’ sensitive medical information to lodge fraudulent claims against the victims’ health policies.

Medical ID theft ruins a victim’s credit, and embeds dangerously wrong information in the victim’s medical records. Victims face large financial losses and enormous stress. It can take thousands of dollars to restore credit and clear up medical records.

Robocalls to consumers and cyberattacks on healthcare facilities increase the risk of stolen consumer medical identities.

  • Half of U.S. adults (49%) are extremely or very concerned about the security of their healthcare data.
  • U.S. adults are most concerned about diagnosed medical conditions and diseases being mishandled or shared without their permission.
  • 36% of adults use an online portal to access their personal health information. Adults older than 34 are more likely to use a portal than 18 to 34-year-olds (39% vs 28%).
  • For adults who don’t use an online health portal, the top reasons are a preference for discussing their health in person (47%) and concern about the security of accessing their health information online (39%).

(SCOUT-Harris Poll, July 2018)

  • Incidents increased 21.7% in 2014.
  • 2.3 million Americans were victimized in 2014.
  • 65 percent of victims paid an average of $13,500 to resolve the crime.
  • Victims learned their medical identity was stolen an average of three months after the incident.
  • Victims spent an average of 200 hours correcting their compromised data.

(Ponemon Institute, February 2015)

Healthcare organizations are among the largest targets of cyber attacks. Stealing sensitive patient data often involves medical identity theft.

Sadly the healthcare sector is ill-prepared to deal with growing incidents of attacks. Healthcare lags behind financial services in devoting time and resources to hardening infrastructure protections.

Healthcare breaches remain a major problem impacting millions of Americans annually.

  • Nearly 32 million patient medical records were breached in the first half of 2019. More than double the records breached over the entire 2018 calendar year. 2018 saw breaches of more than 15 million patient records.
  • Incidents also rose in the first half of 2019, with 285 breaches reported between January and June.
  • At least one health data breach occurs each day since 2016. Hacking was the clear majority in the first half of 2019 (59%). Insider error or wrongdoing contributed to 21% of breaches, theft to 9%, and the remaining causes are unknown.

(Protenus, July 2019)

  • 2018 saw 18 data breaches exposing 100,000 or more healthcare records.
  • Eight of those breaches saw more than 500,000 healthcare records exposed. Three of those breaches exposed more than 1 million healthcare records.

(HIPAA Journal, December 2018)

The ongoing transition to electronic health records increases data breaches involving patient records.

  • One study found 2,149 breaches involving 176.4 million patient records. Individual breaches ranged from 500 to nearly 79 million patient records between 2010 and 2017.
  • Total breaches increased every year, except 2015, starting at 199 in 2010 and rising to 344 in 2017.
  • 70% of breaches involve data stored by healthcare providers. Breaches involving data kept by health plans accounts for 63 percent of all stolen records.
  • The three largest breaches together account for more than half of all stolen records.

(Journal of the American Medical Association, September 2018)

  • Just 27% of healthcare security executives have confidence they can safeguard patients’ medical records.
  • Nearly two-thirds (62%) have little to no confidence they can rapidly adopt security patches and updates without having an operational impact.
  • 70 percent say less than 50% of data-loss incidents over the past 24 months were fully tracked and patched.
  • Healthcare organizations are unlikely to monitor the dark-net for stolen data. Only 37% say they do, compared to 56 percent in financial services, and 48% in retail.

(Radware, November 2017)

  • 58.5 billion robocalls were logged in 2019. That’s a 22% increase from the 47.8 billion robocalls in 2018 — and a 92% increase over the 30.5 billion robocalls in 2017.
  • 26 billion scam calls were logged in 2019 (44% of all robocalls) and another 8 billion telemarketing calls (14% of all robocalls).
  • More than 2.8 billion scam and telemarketing calls are made on average each month.

(YouMail, January 2020)

Phishing emails spoofing the sender’s identity form a major cyber-security threat. And they are increasing. Phishing messages can entice recipients to open malicious links allowing the sender to access personal information. Attacks can steal and manipulate data for potential identity theft … impose ransom demands and other scams.


  • Nearly 1 of 7 hospital employees clicked simulated phishing emails in a 95 campaigns involving nearly 2 million messages
  • Repeated phishing campaigns are associated with decreased odds of clicking a subsequent phishing email.

(JAMA Open Network, March 2019)


In 2019 HHS recovered $5.9 billion from fraud investigations.

  • They expect to recover more than $819 million more from audits and about $5.04 billion from investigative recoveries. They include criminal actions, civil and administrative settlements, civil judgments, and administrative actions by OIG.
  • Filed 809 criminal actions against individuals or organizations accused of engaging in crimes against HHS programs.
  • Filed nearly 700 civil actions — including false claims and unjust-enrichment lawsuits involving civil monetary penalty settlements and administrative recoveries related to medical providers.
  • Excluded 2,640 individuals and entities from participating in Medicare, Medicaid and other federal healthcare programs.

Full report: (U.S. Department of Health and Human Services, December 2019) … News summary

  • Improper Medicare payments in 2018: home health ($3.2 billion, 17.6%) … durable medical equipment ($2.6 billion, 35.5%) … hospice ($2.1 billion, 1.7%) … laboratory ($1 billion, 28.2%) … all services ($31.6 billion, 8.1%).
  • Improper payments totaled $36.2 billion and $41.2 billion for Medicaid in FY 2017.
  • Medicare wrongly paid an estimated $23.8 billion due to medical providers submitting no or insufficient documentation in 2017. Insufficient documentation comprised the majority of estimated FFS improper payments in both Medicare (64%) and Medicaid (57%).

(Government Accountability Office, March 2019)

The federal False Claims Act lets whistleblowers earn a portion of federal civil recoveries stemming from exposing fraud against federal healthcare programs. The FCA also can lead to criminal charges. Whistleblowers are often employees at offending healthcare organizations, with unique access to evidence.

  • The Justice Department obtained more than $2.6 billion in whistleblower health settlements in 2019. That’s out of at least $3 billion in whistleblower settlements overall.
  • This is the 10th straight year DOJ’s civil healthcare-fraud settlements and judgments exceed $2 billion.
  • DOJ also is instrumental in recovering additional millions of dollars for state Medicaid programs.

(U.S. Department of Justice, January 2020)

Insurance fraud is rising, and mounting pressure from schemes is igniting a surge anti-fraud tech deployment:

  • Insurance fraud has risen in the last three years, about two-thirds of insurers say. Insurers are retooling with a mix of advanced analytics.
  • Predictive analytics top the list. 64% of insurers say they’ll earmark funds for predictive tools. A 45% spike from 2016.
  • Investment in link and social media analysis also is growing rapidly, say 43% of insurers vs. only 16% in 2016.
  • One in five insurers (21%) plan to invest in AI in the next 12-24 months.

(Coalition Against Insurance Fraud, assisted by SAS, March 2019)

Artificial intelligence is an increasingly useful tool in rooting out fraud, waste and abuse in healthcare. AI is especially helpful because many medical scams are large-dollar, complex and run by by well-organized crime rings.

  • U.S. health firms use smart agent-based AI to better target fraud. The three most-important expected benefits are fraud-related: stopping fraud before it happens … reducing payments fraud … and reducing fraud management personnel.
  • Just 4.3% of healthcare firms report using AI. Larger healthcare firms (22.2%) are more likely to use AI. None below $500 million in annual revenues do.
  • More than a third (34.1%) of healthcare firms are “very” or “extremely” interested in using smart agent-based AI.

( and Brighterion, April 2020)

Some insurers wrongfully use price optimization to increase rates. This practice analyzes consumer buying practices to increase costs for those customers deemed more “price elastic”. At least 20 states have banned or regulated this practice. A white paper by the National Association of Insurance Commissioners addressed the issue in 2015.

Cyberfraud (e.g., business email compromise, hacking, ransomware, and malware) remains the highest risk for organizations. Some 83% of respondents already observe an increase in these schemes, and 90% expect a further increase over the next year.

Other significant risks with both observed and expected increases include unemployment fraud, payment fraud (e.g., credit card fraud and fraudulent mobile payments), and fraud by vendors and sellers (e.g., price gouging, product misrepresentation, and overbilling).

(Association of Certified Fraud Examiners, September 2020)