What constitutes 'insurance fraud'?

Insurance fraud is defined by the intentional act of deceiving an insurance company in order to gain benefits or payments that one is not entitled to receive. This type of fraud can manifest in various forms, such as exaggerating damages, submitting false claims, or providing misleading information during the application process. The key aspect that makes an action qualify as insurance fraud is the deliberate intention to mislead the insurer for personal gain.

When someone deceives an insurance company, they undermine the integrity of the insurance system, which can lead to increased costs for other policyholders and the overall insurance industry. This fraudulent activity is taken seriously and can lead to severe penalties, including the possibility of criminal charges.

The other options do not align with the definition of insurance fraud. Providing truthful information aligns with ethical conduct, while accidentally omitting details in an application can occur without deceitful intent and may not constitute fraud. Claiming only small damages to avoid higher premiums, while unethical, does not necessarily involve deception with the intent to obtain unwarranted benefits, which is the hallmark of insurance fraud.