What term describes the act of deliberately planning or faking a loss for insurance benefits?

The act of deliberately planning or faking a loss for insurance benefits is known as hard fraud. This term specifically refers to situations where individuals intentionally create a false claim or exaggerate the value of a legitimate claim to gain an undeserved benefit from an insurance policy. Hard fraud is a serious offense and typically involves significant deceitful actions, such as staging accidents or arson, to claim insurance money.

Understanding this concept is critical for those in the insurance field, as it highlights the ethical and legal ramifications of dishonest behavior. Detecting and preventing hard fraud is essential to maintaining the integrity of the insurance industry and protecting policyholders.