All About Insurance Fraud

Ever since insurance was invented, so was insurance fraud. There are many types of fraud, from life insurance fraud to auto fraud. This article will provide a general overview, while discussing the impact of fraud on society.
Most of the time, when someone commits fraud, it is for financial gain. Because of the nature of insurance policies, they are rife with potentials for exploitation. Commonly, insurance policies are exploited by individuals claiming more loss than actually occurred, or inflating the value of the item lost.
Insurance fraud is generally divided into two classifications - soft fraud or hard fraud. Soft fraud is the more common of the two, and is also called opportunistic fraud. This type of fraud occurs when an insured party inflates an already legitimate claim. Soft fraud, for example, happens when an insured individual is involved in a car accident and claims that more damage was done to the vehicle than is true. Soft fraud can happen at the start of a new insurance policy, when an individual purchasing a policy misrepresents their actually situation in order to get a lower premium. An example of this is if someone is buying a car insurance policy but lies about the number of miles on the vehicle to obtain a lower premium
Hard fraud is when someone plans a loss to receive an insurance payout. This type of fraud is usually executed with a fire, "stolen" automobile, or similar that the individual plans themselves. Sometimes entire crime rings are devoted to hard insurance fraud.
An example of life insurance fraud occurred in 2002 when a man named John Darwin disappeared during a canoe trip. His family collected on his life insurance, and he reappeared in 2007 with reported memory loss.
Auto insurance fraud is one of the most common types of fraud. It is estimated that in 1996 as much as 36 percent of auto-insurance claims were fraudulent in some way. Soft fraud in auto insurance fraud includes what was mentioned above, but also situations where a person claims an injury that did not actually occur during the accident in question, or if someone registers their automobile in a location that the insurance is less expensive. For instance, if a person lives in a major city, it is more expensive to insure the car, so they will register it with a suburban address in order to obtain a lower premium.
Hard insurance fraud is usually executed in a "crash for cash" scenario, which has several different varieties of staged crashes. One is the "classic rear-end shunt" where a driver will slam on their brakes, causing the car behind them to crash into them. Many times, the brake lights are disabled, but reconnected before an investigation is conducted. Another common "crash for cash" scenario is one called the "helpful wave shunt," where a driver waves another car ahead of them in a line of traffic, then crashes into them and denies ever waving.
Insurance fraud is a very real problem in the US, with 2006 losses estimated to be near $80 billion. It is estimated that 3-10% of all medical claims contain some element of fraud, resulting in billions of dollars in loss.

John James is the president of Virginia Insurance Group, a leading broker of Richmond insurance policies such as Richmond homeowners insurance and Richmond commercial insurance. To learn more about Virginia Insurance Group visit them online at: VirginiaInsurance.com.

National Insurace Contributions for UK Expats - The Facts

There seems to be a lot of confusion regarding the payment of National Insurance Contributions and the benefits of the state pension for UK Expats.
What I want to achieve with this post therefore, is to give you an idea of the basic facts regarding the basic state pension and the necessary steps that you would need to take, should you want to make contributions on a voluntary basis and/or make up missed payments.
Armed with this information, you will then be in a position to make an educated decision on how to proceed.
Basic Facts:
To achieve a full basic state pension you need to have achieved a certain number of qualifying years. A qualifying year is a year where one of the following applies:
• you have sufficient income to pay National Insurance Contributions
• you are treated as having paid National Insurance Contributions
• you are credited with enough National Insurance Contributions
If you are a man born after the 6th of April 1945 or a woman born after the 6th of April 1950, then you need to achieve a total of 30 qualifying years in order to achieve the full basic state pension.
For tax year 2011/2012, the full basic state pension will be GBP102.15 per week. This will increase annually by the highest of prices, earnings or 2.5 per cent.
If you have less than 30 qualifying years, your pension will be reduced on a pro rata basis. E.g. if you only had 15 years, you would get GBP51.08 per week (15/30 = 50% of GBP102.15).
Step 1 - Find out where you are now.
Your first step should be to contact the state pension forecasting team in Newcastle and ask for a pension forecast.
This will tell you the number of qualifying years that you already have as well as the level of state pension that you can currently expect.
Their telephone number is +44 191 218 3600. If you contact them, they will then send you the completed relevant form for you to sign and return to them. (Remember, as with all communications with HMRC, to have your NI number handy when you call.)
Alternatively, if you want to speed the process up, you can download the relevant form from their website and send it directly to them. The address to send it to is:
State Pension Forecasting Team, The Pension Service, Tyneview Park, Whitley Road, Newcastle upon Tyne, NE98 1BA, England.
Allow them a few weeks to get back to you.
Step 2 - Make Voluntary Contributions
The next step, if you don't already do so, is to start making regular voluntary contributions. There are 2 types of contribution that you can make, either Class 2 or Class 3.
To qualify for Class 2 Contributions, you must have been 'ordinarily' employed or self-employed immediately before you went abroad. (If you are in doubt as to whether you qualify, contact National Insurance Contributions - International Caseworker Team on +44 191 225 4811).
If you don't qualify for Class 2, then you need to make Class 3 contributions.
Class 2 contributions have the following benefits:
• they count towards your State Pension when you retire
• they entitle you to the Employment and Support Allowance (previously known as Incapacity Benefit) and bereavement benefits when you return to the UK
Class 3 contributions have fewer benefits. Namely, they don't entitle you to the Employment and Support Allowance when you return to the UK.
In addition, Class 3 contributions are more expensive. For Class 2 contributions, the payment is equivalent to GBP2.50 per week (2011/2012). Class 3 payments are equivalent to GBP12.60 per week (2011/2012)
As you can see, wherever possible, it makes sense to pay Class 2 Contributions.
To commence contributions (Class 2 or 3) you need to complete the form CF83, which can be found on the last 2 pages of the NI38 document. You can find a copy by Google searching "NI38".
Payments can be made monthly by Direct Debit or with an annual payment.
Step 3 - Make Up Missed Years
If you haven't been making any contributions for some time and still do not have 30 qualifying years, then you can make up missed years going back for the last 6 years. Your State Pension Forecast (mentioned above) will tell you how much you need to pay to make up each of these years.
Instructions on how to make payments for these missed years will be on the forecast letter.

Ross Naylor is an experienced, UK qualified financial adviser. He has been providing common sense financial advice to British expatriates for the past 10 years.
He writes on a range of financial issues in a regular magazine column, ezine and his blog - http://www.aesinternational.com/rossnaylor/blog.