What does "fraud" represent in the context of insurance?

Fraud in the context of insurance refers to intentional acts where an individual or entity deliberately distorts the truth to gain an advantage or benefit, typically to unjustly obtain insurance proceeds. This can manifest in various ways, such as providing false information during the application process, exaggerating claims, or staging accidents to collect payouts. The key element is the intent behind the action; it is not a mere misunderstanding or an accident. Instead, fraud involves a conscious decision to deceive. Recognizing fraud is crucial as it undermines the integrity of the insurance system and can lead to increased premiums for all policyholders and legal consequences for those committing fraud.