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If you are below the age of 34, you might be more inclined to engage in insurance fraud, as indicated by recent research from the University of Georgia.

The latest study implies that the younger individuals are, the higher the likelihood they may deceive a company or adjuster to obtain preferred funds or results.

However, certain fraud perpetrators may not fully comprehend that they are breaking the law while doing so.

“A significant number of individuals, particularly younger ones, maintain an adversarial stance towards insurance agencies,” stated Brenda Cude, the study’s leading author and a professor emerita in the UGA College of Family and Consumer Sciences. “When individuals feel compelled to contend, it may drive them to actions they might not otherwise consider, particularly if they lack awareness that such actions are technically unlawful. Various significant repercussions could arise from those choices.”

40% of younger individuals unbothered by insurance fraud

The researchers utilized data from the Coalition Against Insurance Fraud, which canvassed nearly 1,500 adults regarding their perspectives on insurance claims.

Among other inquiries, the survey asked participants if they would:

• Take into account or had reported damages that occurred prior to a car accident in a claim (or if they ever did so in the past).
• Omit information or present false details on an insurance application to obtain improved coverage or a reduced premium.
• Assist a medical provider in billing for treatments they had not actually undergone, among other scenarios.

Participants were also questioned if they were aware of anyone who had engaged in such fraudulent activities.

(An individual) might consider it wise to inform the insurer that their vehicle is parked at their parents’ residence, while it’s actually situated in downtown Atlanta. However, that’s technically fraud.”

—Brenda Cude, College of Family and Consumer Sciences

Forty percent of respondents aged 25 to 34 reported being comfortable with the fraudulent behaviors described in the examples.

They perceived it as an intelligent method to conserve money or as assistance to a friend facing difficulties.

“Age played a significant role. This may partly stem from the detached manner in which younger adults interact with insurance companies,” Cude explained. “They think, ‘I’m not harming a person if I commit fraud. This is merely a website.’ They might see it as a good strategy to inform the insurer that their vehicle is parked at their parents’ house while it’s actually in downtown Atlanta. Nevertheless, that constitutes fraud.”

Generational divide may indicate ethical and moral distinctions

The more carefree approach of younger generations might influence their readiness to partake in insurance fraud, the researchers noted.

Only approximately 5% of individuals aged 55 and above indicated that they approved of fraudulent actions. Cude proposed there might be a correlation between age and ethical considerations, with older participants exhibiting a stronger moral compass.

Millennials and Gen Z altered their position on insurance fraud only if they viewed significant repercussions; immediate, widespread harm from their actions or felt remorse about it.

“The younger generation may simply have a looser connection to ethics and a situation-driven moral code. They may not be troubled by their actions, even if they are aware that what they are doing is wrong, because they feel wronged and justified,” she remarked.

Individuals harbor negative feelings towards insurance companies and lacks understanding of fraud

In general, people’s sentiments regarding insurance companies were overwhelmingly negative — irrespective of age. This sentiment is unlikely to shift and won’t influence whether individuals commit fraud, Cude noted.

However, one potential reason for the younger generations’ indifference to insurance fraud could be their lack of understanding regarding what precisely qualifies as fraud or how fraudulent claims may adversely affect others.

“We need to give more thought to how we can engage younger individuals concerning insurance fraud. Part of the solution could be experiential learning, but another part may also involve education,” Cude expressed. “I don’t believe people truly comprehend their insurance well or the difference between legitimate claims and what is genuinely considered fraudulent.”

Education might encompass understanding how insurance functions as well as why insurers make their decisions.

This study was published in the Journal of Consumer Affairs and co-authored by Hanchun Zhang.

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