- A form of fraud where an individual claiming to be an insurance agent sells a victim a non-existent policy and collects premiums, while never actually intending to provide benefits. The unauthorized insurer will then disappear from the area, leaving the oftentimes-unaware victim paying premiums for an insurance policy that doesn't exist, leaving the individual with no protection whatsoever.
fake insurance, false insurance, fraudulent insurance
Related Terms and Acronyms
- Clean Sheeting — Definition,
- A type of insurance fraud where an individual deliberately fails to disclose a pre-existing condition in order to receive coverage, sometimes with the help of an insurance broker.
- Collusion — Definition,
- A secret, deceitful agreement by two or more parties to defraud others.
- Fidelity Bond — Definition,
- Insurance that protects a business from losses due to employee fraud, such as theft, forgery or fraudulent trading.
- Insurance (insur) — Abbreviation,
- An arrangement where one party provides financial protection to another party for specific damages or losses.
- Insurance Fraud — Definition,
- An illegal attempt by an individual or entity to receive insurance benefits that they would otherwise not be entitled to or for an insurance company to deny a legitimate insurance claim.
- Money Laundering (ML) — Acronym,
- A process used by individuals to conceal illegally acquired funds by converting them into seemingly legitimate income. The term is generally associated with organized crime and those who need to legitimize illegally earned funds.
- Unfair Claims Practice — Definition,
- The act of an insurance company avoiding or reducing valid insurance claims.