What constitutes insurance fraud?

Providing false information while making a claim is a clear example of insurance fraud because it involves an intentional act to deceive the insurance company. When an individual submits a claim and knowingly includes information that is untrue—such as inflating the value of a loss or fabricating an incident—they are attempting to secure benefits that they would not legitimately qualify for. This act undermines the integrity of the insurance system, increases costs for all policyholders, and can result in severe legal consequences, including penalties and imprisonment.

The other options, while related to the insurance industry, do not fall under the definition of fraud in the same way that providing false information during a claim does. Misleading advertising by an insurance company pertains to the marketing practices of insurers rather than the behavior of the claimant. Claiming coverage that doesn’t exist might be a misunderstanding or misuse of a policy rather than a fraudulent act if done without intent to deceive. Neglecting to pay the premium, while it can result in policy cancellation or issues with coverage, does not involve deception and is typically a contractual matter between the insurer and the insured. Thus, the act of providing false information during a claim is specifically designed to deceive and manipulate the insurance process, making it a textbook case of insurance fraud.