North Carolina Adjuster Practice Exam

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What type of fraud is Ian committing by collecting money without paying claims?

Policy fraud
Insurer fraud
Claim fraud
Consumer fraud

The correct answer is: Insurer fraud

Ian is committing insurer fraud by collecting money without paying claims. This type of fraud typically involves a violation of an insurer's duty to pay valid claims. When an individual or entity collects premiums or funds but fails to fulfill the obligation to settle claims, it undermines the trust and reliability of the insurance system. This behavior harms not only the policyholders who expect their claims to be honored but also the overall integrity of the insurance industry. In this context, insurer fraud specifically refers to actions taken by an individual or organization that exploit the insurance process for financial gain while neglecting their responsibilities towards policyholders. The other choices reflect different types of fraud, which do not apply to Ian’s actions in this scenario.