An insurance fraud investigation is an investigation conducted to determine whether or not insurance fraud is taking place. The investigation may be done by a specialized insurance investigator who works for the insurance company or a private consulting firm, and it can also involve representatives of government law enforcement. Like investigations in law enforcement, the goal of an insurance fraud investigation is to determine what happened, whether or not it was legal, and who was responsible.

Insurance fraud is a global issue with an annual cost which has been estimated in billions of United States dollars. In addition to being harmful for insurance companies, which may lose money paying out on fraudulent claims, insurance fraud also hurts everyone who buys insurance, because premiums must be higher to compensate for fraud. It can also involve the government, as in a case where someone profits from insurance fraud and files fraudulent tax documents, or when someone sets a fire which requires the fire department to respond, wasting public resources.

Investigations into suspected cases of fraud are triggered when insurance adjusters feel that a case they are evaluating seems suspicious, lacks key information, or is outright fraudulent. The insurance company may alert law enforcement to the fact that someone is under investigation for suspected insurance fraud, and the insurance fraud investigation begins. During the investigation, the investigator may check the claimant's credit, perform surveillance, collect information from the scene, consult experts, and use law enforcement resources for assistance.

Some examples of insurance fraud investigation involve investigations into paperwork or claims which are suspected to be fake, investigations into staged accidents, and investigations which are designed to uncover collusion or lies. For example, if a doctor and patient collude to make it appear like the patient has had a medical test which didn't occur and both split the insurance money for the procedure which never happened, this is insurance fraud, and a well organized insurance fraud investigation can uncover the specifics of the situation.

If an insurance fraud investigation does determine that fraudulent activity occurred, the insurance company will not pay out the claim, and the claimant could be subject to legal penalties. People who are under investigation for suspected insurance fraud should retain a lawyer, whether or not they are guilty, and they should familiarize themselves with the laws surrounding insurance fraud and their legal options. In a conspiracy to commit fraud, for example, it may be possible to receive a reduced sentence or lowered fine in exchange for outing other members of the group.