Prevent Insurance Fraud
Also read TDI's brochure Insurance Fraud.
What is Insurance Fraud?
Insurance fraud is an illegal act in which someone lies or intentionally misrepresents facts about insurance for financial gain. Companies, agents, doctors, and consumers have all been known to commit insurance fraud.
Knowing the common types of insurance fraud can help you recognize and prevent it:
- Unlicensed insurance. It is illegal to sell insurance in Texas without a license. Unlicensed companies usually don't meet the state's financial requirements and may not have the money to pay claims. Consumers and small businesses who have difficulty affording coverage are usually the victims of these schemes. You can learn a company's or agent's license status by calling the Texas Department of Insurance Consumer Help Line at 1-800-252-3439 or by visiting our website at www.tdi.texas.gov.
- Health care provider fraud. Doctors and hospitals commit fraud when they over-bill insurance companies for services they provided, bill for services they didn't provide, or perform unnecessary tests and procedures.
- Agent fraud. Insurance agents commit fraud when they sell fake policies, lie on an insurance application, or keep your premium for their personal use.
- Homeowner fraud. People commit homeowner fraud when they exaggerate or pad claims or file fake claims, including burglary and arson claims.
- Auto accident fraud. People commit auto accident fraud by padding their claims or filing a claim for an accident or theft that never occurred. Causing an accident and making it look like it was someone else's fault is also fraud.
- Workers' compensation fraud. Employees commit fraud when they lie about a work-related injury or illness to get medical or income benefits. Attorneys and doctors commit fraud if they submit bills for unnecessary services or services that they never provided.
- Mortgage fraud. Residential mortgage fraud occurs when borrowers make false or misleading statements to get mortgage loans. Mortgage fraud also includes diverting escrow funds at settlement.
Report Insurance Fraud
Insurance fraud is a crime in Texas. Texas law requires you to report insurance fraud within 30 days. The law protects you from any retribution or liability as a consequence of reporting fraud.
You may report suspected insurance fraud to the Fraud Unit by
- calling the Consumer Help Line at 1-800-252-3439
- visiting our website at www.tdi.texas.gov
- mailing your report to:
Texas Department of Insurance
PO Box 149336
Mail Code 109-3A
Austin, TX 78714-9336
TDI's Fraud Unit
The TDI Fraud Unit is a law enforcement agency that
- investigates reports of fraud
- makes referrals to criminal district attorneys and federal prosecutors
- seeks criminal indictments
- makes arrests
- works with law enforcement agencies to investigate and prevent fraud.
Fraud Unit staff includes peace officers, attorneys, fraud examiners, and investigators. It also has three special prosecutors that work in district attorney offices in Dallas, Harris, and Bexar counties.
The Fraud Unit in 2013:
- received 12,444 fraud reports
- opened 559 investigations
- identified $10.3 million of fraud
- referred 222 cases for prosecution, which led to 108 indictments and 108 convictions
- helped victims of fraud get $7.5 million in restitution.
Request a Speaker
The TDI Fraud Unit can send a speaker to your event or presentation to talk about insurance fraud. To request a speaker, call the Speakers Bureau program at 512-305-7196 or visit our website at www.tdi.texas.gov.
We also provide training to law enforcement agencies and insurance companies. To request training, call the Fraud Unit at 512-463-6492.
For more information contact:
Last updated: 09/06/2014