[The Police File]Taking Advantage of an Accident to Rest in the Hospital Is ‘Insurance Fraud’

Insurance fraud is often called a ‘crime without victims.’ This is because it is not a crime that harms people but is aimed at claiming insurance money from insurance companies. For this reason, although insurance fraud is a clear crime, the awareness of it as a crime is low.

Insurance fraud is divided into ‘hard insurance fraud’ (gyeongseong fraud), which involves deliberately fabricating accidents or claiming insurance money for accidents that did not occur, and ‘soft insurance fraud’ (yeonseong fraud), which involves inflating damages or distorting facts to claim insurance money.

Soft insurance fraud is particularly problematic. While hard insurance fraud, like the ‘Valley Murder Case,’ is recognized as a crime even by the general public, awareness of soft insurance fraud as a crime is weak.

According to a ‘Consumer Survey on Insurance’ conducted by the Korea Insurance Research Institute in 2017, 53.5% of consumers answered that they had witnessed soft insurance fraud around them. However, when asked whether light soft insurance fraud should be punished, 68% answered ‘No,’ more than twice the 32% who answered ‘Yes.’ Although it is a common crime around them, most people do not consider it a crime.

Soft insurance fraud is relatively easy to commit, so it is commonly seen. For example, someone involved in a traffic accident might not be in pain but decides to stay in the hospital a few extra days to ‘rest well at the hospital,’ or uses the opportunity to repair a vehicle that had issues before?these also count as insurance fraud.

Cases of receiving plastic surgery or cosmetic procedures and falsely claiming treatment for pain relief are also typical examples. Last month, the Seoul Eunpyeong Police Station sent to prosecution without detention a dermatologist charged with insurance fraud under the Insurance Fraud Prevention Act, violation of the Medical Service Act, and fraud, along with 185 patients charged with insurance fraud under the Insurance Fraud Prevention Act. They are accused of disguising skin cosmetic procedures as athlete’s foot treatment to falsely claim health insurance benefits from the National Health Insurance Service and reimbursement from insurance companies.

Earlier this year, Apple added a clause to its terms stating that ‘AppleCare Plus’ subscribers who deliberately damage their devices to get repairs can be punished for ‘insurance fraud.’ This was due to the widespread perception that paying the subscription fee but not getting repairs results in a ‘loss.’ Because of this, a ‘tip’ to deliberately damage devices for repair as the AppleCare Plus subscription expiration date approaches circulated in online communities, even when there was no problem with the device. Some users deliberately damaged their items just before selling them on the secondhand market to use the phrase ‘AppleCare Plus repair’ as a kind of certification mark. All of these are insurance fraud.

Recently, the National Assembly’s Political Affairs Committee held a subcommittee meeting and passed the ‘Amendment to the Special Act on the Prevention of Insurance Fraud.’ This is the first amendment to the Special Act on the Prevention of Insurance Fraud since it was enacted in 2016, seven years ago. Although it has just passed the standing committee subcommittee, both ruling and opposition parties show little disagreement with the bill, making its passage in the plenary session highly likely. The bill includes strengthening preemptive measures against insurance fraud crimes and increasing penalties upon detection. In particular, those caught committing insurance fraud will face not only punishment but also financial losses such as recovery of defrauded insurance money and cancellation of insurance contracts.

Insurance fraud is a clear crime regardless of the amount involved. With the law revision imminent, it is worth reconsidering before filing an insurance claim. Otherwise, later protests like “I didn’t know,” or “Why is this illegal?” will be of no use.

This content was produced with the assistance of AI translation services.