Fraud

Insurance fraud costs consumers in the U.S. between $80-120 billion each year, equaling about $950 per family annually. It is the second most profitable crime in the U.S. behind only illegal drug sales. Examples of insurance fraud include but are not limited to:

  • Deliberate attempts to stage an accident, injury, theft, arson or another type of loss that would be covered under an insurance policy (e.g., setting fire to your home)
  • Exaggerating a legitimate claim (e.g., doubling the value of stolen jewelry)
  • Knowingly omitting or providing false information on an insurance policy application (e.g., purchasing a policy for a previously damaged vehicle and omitting the damage in the application to file a claim at a later date)

North Dakota Fraud Referral Statistics

  2014 2015 2016 2017
Insurance Fraud Cases 192 192 227 240
Investigative Criteria Not Met 48 57 76 108
No Jurisdiction 20 32 29 22
No Evidence of a Crime 19 15 32 22
Waiting Prosecution Decision 0 1 4 1
Declined by Prosecutor 0 1 1 1
Prosecuted 18 9 7 7
No Further Review (Regulatory Only) 6 0 9 24
Prosecution Not Appropriate 29 13 4 16
Referred Inside DOI

13

22 11 5
Referred Outside DOI 3 6 2 4
Statute of Limitations 10 2 1 6
Unable to Prove Beyond a Reasonable Doubt 26 31 12 23
Open 0 1 39 1
Amount of Actual Loss $818,865.88 $1,045,515.10 $502,886.81 $148,616.86


A common misconception about insurance fraud is that it is a victimless crime, however, that couldn't be further from the truth. Insurance fraud doesn't just negatively affect insurance companies - it touches all North Dakotans. That is why the North Dakota Insurance Department created the Insurance Fraud Unit, a portion of the Department's Legal Division. Department detectives regularly work closely with multi-jurisdictional task forces, state and federal agencies, fire departments, local law enforcement, insurance companies and the public to identify, investigate and prosecute insurance fraud. Additionally, the Insurance Fraud Unit maintains statistics related to insurance fraud investigations, participates in the legislative process, offers public speaking and training opportunities, executes search warrants and partners with local, state and federal agencies to seize evidence or apprehend suspects during raids.

The Department has also recently developed a fraud prosecution program which involves Department attorneys working with county state's attorneys to prosecute insurance fraud and related offenses across the state. Insurance fraud is a complicated and specialized area of law. Many county state's attorneys are already burdened with heavy caseloads that may not allow them adequate resources to prosecute cases referred to them. The fraud prosecution program seeks to alleviate some of that burden and ensure appropriate resources are in place by partnering with county state's attorneys to prosecute these offenses in North Dakota.

If you suspect that a fraudulent insurance act is occurring, or has occurred, please contact the Department. Individuals can report fraud online through the National Association of Insurance Commissioners (NAIC) Online Fraud Reporting System (preferred method) or submit a Uniform Suspected Insurance Fraud Reporting form (SFN 58333).