Insurance fraud is commonly classified as an act which involves a fallacious insurance claim in the hopes of monetary compensation in exchange for damages that never actually took place. Insurance fraud is not just committed by insured customers. The roles may be reversed, and in some scenarios, the customers are the victims. The customers might be sold false insurance that has no real coverage, or their insurance returns might be stolen.

Insurance fraud is generally categorized into two types. Hard fraud is the variant of fraud where the person has purposeful intent and causes a dubious accident, damage or loss with the sole purpose of gaining false compensation from the insurance companies. Hard fraud is often performed by sole perpetrators but can also involve groups.

Soft fraud is the variant of fraud that is generally unplanned and involves a person telling small lies to get greater compensation. For example, in the case of an accident, the victim might say their injuries are worse than they really are in the hope that they will be able to secure greater compensation.

In any scenario where insurance fraud is to have taken place, the dominant elements of insurance fraud must also exist. These elements must be proven to exist if there is to be any legal action against the perpetrator. The central elements include having deliberate intent when making a false statement; the person has not made the statement accidentally or in ignorance but deliberately. The statement must have relation with an insurance or monetary claim and cannot be irrelevant. The statement must also be relevant and cause impact in monetary terms. All these elements must exist together if insurance fraud is to be proven in court and any legal action is to take place.

Depending on the circumstances and compensation involved, insurance fraud can result in very serious consequences ranging from massive fines to even lengthy jail time. Also, insurance fraud cases can be complex and confusing. It is highly recommended that an experienced attorney is contacted to defend your case as this can give you the best possible outcome.