The term "insurance fraud" covers a wide array of activities that have the same basic purpose: to obtain payment from an insurance company by deceptive or dishonest means. While incidence of fraud is estimated to be low, it remains an area of great concern for insurers.
Losses Due To Fraud
As with most crimes, it is impossible to accurately gauge losses to fraud because only that which is detected is measurable, and the typical suggestion is that the "true" value may be significantly greater than the measurable value.
With that in mind, it is (gu)estimated that 10% of insurance payments are attributable to fraud - which is again an entirely arbitrary number - and the cost of losses are ultimately borne by the consumers who pay insurance premiums.
I have thus far found no source that expresses the actual (detected) fraud as a percentage of insurance claims.
Tort vs. Crime vs. Moral Imperative
Insurance fraud is clearly a civil offense: it is a misrepresentation that seeks to exploit a contract between private parties. However, because payments made on fraudulent claims raise the premiums paid by all insured individuals, insurance fraud is often treated as a criminal offense as well.
The crime of insurance fraud is defined and prosecuted on the state level. There is only one clause in federal law that addresses the topic of fraud, but this pertains exclusively to federal healthcare benefits programs. Insurance fraud is classified as a criminal offense in 48 states (the exceptions being Oregon and Virginia), and 41 states have a separate law enforcement agency dedicated to fraud prosecution.
A study conducted in 2003 suggests that between 20 and 25 percent of Americans believe that it is "acceptable" to bilk insurers outright, including both hard and soft fraud, and about 10% of subjects indicate that they would be willing to
