What s Home Insurance Fraud?

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  • Written By: M. Lupica
  • Edited By: John Allen
  • Last Modified Date: 10 February 2020
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Home insurance, also commonly referred to as “homeowner’s insurance,” is a type of insurance that covers damage to homes from a variety of sources, both natural and stemming from the acts of other people. Home insurance also typically includes liability coverage for personal injuries that occur in the home due to the negligence of the owner. Home insurance fraud is committed whenever the claimant, through his or her acts or statements, makes a misrepresentation to the insurance company with the intent of fraudulently receiving benefits under the policy.

Home insurance is insurance that encompasses protection for the holder for many different causes of damage to their home and the contents within. Typically, home insurance protects against damage from any type of storm or fire. Depending on the location of the home, it may provide for damage from the weight of accumulated ice or snow, and even may cover damage stemming from the eruption of a volcano. Some home insurance policies may cover damage from riots or a break in by a burglar.

Home insurance policies can encompass liability insurance for the owner as well. This protects the owner in case his or her own negligence in the maintenance of property causes injury to a third party who is invited as a guest onto the premises. The home insurance policy will cover all legal costs, including damages for medical costs, pain and suffering, and lost wages.


Home insurance fraud occurs when the holder of a home insurance policy fraudulently attempts to recover under their policy through a misrepresentation or another fraudulent act. The classic example of home insurance fraud is where the claimant has a legitimate claim for recovery under their home insurance policy, but misrepresents the amount of property actually damaged or stolen, sometimes by even adding nonexistent items to the claim. Additionally, one can be held liable for home insurance fraud if the home or property is intentionally damaged with the intent of fraudulently making a claim under the policy.

Home insurance fraud is treated very seriously, though penalties vary from jurisdiction to jurisdiction. Typically, penalties include fines, probation, or community service. Anyone found to have committed home insurance fraud will also generally have to pay the defrauded insurance company all the money he or she fraudulently received with interest tacked on. The facts will always dictate the penalty, and particularly egregious cases will usually result in jail time.


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