1. Overstating Value – In the event of a break-in, determining the value of your stolen possessions can be difficult. Overstating the value of a family heirloom or other object with more sentimental than monetary value can be tempting, but it’s important to remember that doing so is insurance fraud.
2. Storm Damages – When a home sustains damage from storms or other events that are covered by their policy, some homeowners are tempted to blame damages that occurred through non-covered events on the storm as well. Unscrupulous homeowners may also damage their own property to receive a settlement.
3. Staged Fires – The idea that a homeowner could set fire to their own home is a shocking one for most people, but it does happen. When facing foreclosure or other financial devastation, some desperate homeowners have been known to resort to arson. In addition to criminal insurance fraud charges, they almost always face arson charges as well; this can add up to hefty fines and significant prison time.
4. Salesman-Induced Fraud – This common scam is typically perpetrated by a salesman with most clients being unaware of the legalities; touting the ability of their equipment to detect “microscopic siding damage from hail” or other damages, these shady salespeople bill insurance companies to replace virtually undamaged siding or other surfaces.
5. Underwriting Fraud – Most homeowners don’t realize that being dishonest on insurance applications or refusing to disclose important information is considered fraud, and can carry criminal penalties. Fudging the truth to get a better premium may be common, but it’s unethical and illegal.
6. Inflated Claims to Avoid Deductibles – For cash-strapped families, covering the deductible to make repairs can be a challenge. When less-than-reputable repairmen suggest inflating the claim to avoid the expense, some homeowners will jump at the opportunity without considering legal ramifications.
7. Orchestrated Vandalism – Offering a portion of the proceeds from an inflated claim to someone who carries out a solicited act of vandalism is a common type of insurance fraud. This willful breaking of the law for financial gain is a serious offense.
8. Selling or Removing Insured Property – Selling, giving away or hiding insured property for the purpose of filing an insurance claim is a common scam that homeowners pull, despite how easily discovered it can be.
9. Filing a Claim on Property That Never Existed – In a cousin to the overstating scam, some homeowners will file claims for damaged property that they never owned in the event of a catastrophic loss, due to the difficult nature of tracking losses in such situations.
10. Taking a “Kick Back” From Contractors – Unscrupulous contractors sometimes offer homeowners a “kick back” from the insurance claim in return for using their services for repairs. In addition to being fraudulent and illegal, this also puts homeowners in the position of trusting a disreputable contractor to perform essential repairs to their home. Should the contractor default on an agreement or provide shoddy work, the homeowner is left with no legal recourse due to their own unethical and illegal behavior.

The Insurance Information Institute estimates that fraudulent claims on homeowners policies cost insurers up to $30 billion per year. As a result of incurring this staggering expense, insurance companies raise premiums and rates; committing insurance fraud isn’t just stealing from your insurance carrier, but also from your neighbors.

1. Statutes Vary From State to State – Depending on where insurance fraud occurs, the same act can carry a penalty of restitution and community service or, at the other end of the spectrum, a jail sentence under a felony conviction.
2. “Hard” and “Soft” Insurance Fraud Carry Different Penalties – “Hard” insurance fraud is defined as a willfully illegal and fraudulent scheme designed solely to obtain money from an insurance claim. “Soft” fraud occurs when someone doesn’t fully disclose pertinent information or “fudges” the details to profit from a legitimate claim. In most states, these types of fraud carry different penalties.
3. Mail Fraud – Fraudulent schemes that involve the use of the U.S. Postal system can face fines and up to 20 years of prison time. In the event of fraud that targets a financial institution, fines can reach up to $1 million and be accompanied by a maximum prison sentence of 30 years. Using the U.S. mail system to mail a fraudulent insurance claim is in violation of this statute.
4. Health Insurance Portability and Accountability Act – The HIPAA Act of 1996 made healthcare fraud a federal crime punishable to up to 20 years in prison. This law protects both private insurance companies and government programs, and prohibits the willful falsification of facts or failure to disclose pertinent information in connection with a health insurance claim.
5. Wire Fraud – Using the telephone, internet or a fax machine to carry out fraudulent insurance schemes is, like mail fraud, a federal crime. The penalties can include up to $1 million in fines and imprisonment for up to 30 years.
6. Medicare Fraud – Making a fraudulent Medicare claim can carry fines between $5,000 and $10,000, plus three times the amount of damages under the federal False Claims Act.
7. Workers Compensation Insurance Fraud – Because worker compensation laws vary in each state, the penalties of workers comp insurance fraud vary as well. In some states, any payment at all received from a fraudulent workers comp claim is considered a felony offense and carries a maximum sentence of 30 years imprisonment.
8. Conspiracy Laws – In some states, collusion or assisting someone in making a fraudulent insurance claim or application can carry fines and jail time.
9. Injury Laws – Exaggerating pain or injuries sustained in a car accident for the purpose of receiving higher compensation is considered auto insurance fraud, and is punishable as such under various state laws and statutes..
10. Felony Insurance Fraud – Staged accidents that involve the destruction of property for financial gain via an insurance claim is considered felony insurance fraud. Fines and maximum jail times vary from state to state, but can be up to $150,000 and 10 years imprisonment.

In conclusion, anyone who knowingly provides inaccurate information or doesn’t divulge pertinent details during the application, underwriting or claim-filing process can potentially face fraud charges. If fraud is discovered but charges are not filed, it almost always precludes the guilty party from obtaining insurance through traditional channels in the future.

These days, everyone is encouraging you to go green. And by going green, we don’t mean rooting for Michigan State or Baylor University football. We mean, of course, choosing technologies which leave less of a carbon footprint on the environment. The good news is that there are actually some green home heating technologies which could save you money on your heating bill over the winter. One in particular-heating with corn-will cost you a little extra in your homeowners insurance, but the cost is more than outweighed by the amount you will save in natural gas or propane.

Corn burning stoves and furnaces are readily available at home improvement stores as well as specialty stores which only deal in pellet stoves and corn burners. They provide a very pleasant heat while saving you a great deal of money on your utility bills.

We have a couple of friends who installed corn burners. They both claim that they can shut their furnaces off for most of the winter and heat their homes entirely with corn. One of them even claims that the house gets so warm, he has to open up windows. And the cost is a fraction of what they would pay to heat their homes with natural gas.

Perhaps the best part of heating your home with corn, however, is that it is an entirely renewable resource. Consider this:

• When you burn natural gas, you use up a resource that is not replenishable.
• When you burn wood, you are cutting down trees which take 20 years or more to grow,
• When you burn corn, you are burning a product which can be grown again and again, year after year, in the same field. If the demand for corn grows, farmers would have little trouble increasing output to meet the demand. Not only is this good for the environment, but it can also be good for the agricultural community.

While burning corn will save you a good deal of money, as well as giving you a very warm house, there are a couple words of caution we should mention:

• The smoke from a corn burner smells like popcorn. If this smell bothers you, and you don’t want to deal with it outside in your yard, a corn burner is not for you.
• Corn burners require a certain amount of upkeep and maintenance. If you aren’t someone who is willing to deal with any inconvenience, they probably aren’t for you.
• Many cities won’t allow you to use a corn burner as the only heat source in your home. In such cases, you will also need to have a traditional furnace in your home.
• In many cases, your homeowners insurance will be slightly more expensive with a corn burner, much like it would be if you used a wood burning stove.

Whether you are buying life insurance, auto insurance, or homeowners insurance, there are certain qualities you look for in an insurance agent. We were watching The Incredibles recently and were kind of surprised to see the protagonist, a washed up former superhero, was working as an insurance agent. While Mr. Incredible actually did a pretty good job as an insurance agent, even getting himself in trouble for helping out his clients, there are some superheroes we really wouldn’t want as our insurance agents:

• Wonder Woman. Not only is she really not dressed for business, but she has that golden lasso which forces you to tell the complete truth. And let’s face it, there are times when you’re making a homeowners insurance claim that you may not want to divulge every single little fact. Not that you would lie, of course. But you don’t want to be put in the position where you have to be more truthful than you want to be, either.
• Superman. Some people are just a little too goody-goody. We don’t know about you, but we’re not sure we’d want to do business with Superman. Besides, we’ve seen Superman II and we’re a little concerned that outlaws from planet Krypton might wreak havoc on anyone who has had dealings with Superman while he’s off cavorting with Lois Lane.
• Wolverine. He’s cool, but he isn’t entirely reasonable and we’re not sure we would want to have any business dealings with him.
• The Incredible Hulk. Have you ever run into a salesperson you simply could not say no to? There’s a good reason why the Hulk’s alter ego isn’t into sales, insurance or otherwise. After all, you wouldn’t want to see him when he gets angry.
• The Wonder Twins. Besides the fact that they’re a little young to be insurance agents, the Wonder Twins would be able to fix just about anything that would go wrong with your house. So, what’s wrong with that, you ask? We don’t know about you, but we’d rather not have a wall or window on our house made of ice if we can help it, even temporarily.

With all of the superheroes we don’t want as insurance agents, we have found one that we think would be completely acceptable. The Flash. After all, he’s as quick as lightning. And when you have an insurance claim, you want someone that can spring into action immediately or sooner.

There are tons of articles written about the relative merits of renting versus buying your own home. While we’d be the last ones to suggest that renting isn’t fine for some people, we believe there are plenty of good reasons to shell out a little extra money for property taxes, homeowners insurance, and home repair. And most of them have absolutely nothing to do with equity or whether or not buying a home is a good decision financially speaking.

The fact is that there are some things you can do in your own home that you simply can not do in most apartments. True, you have to do more of the work by yourself in your own home (or hire someone to do it), but we believe that , all things considered, it’s well worth the price. After all, if you live in an apartment, you’re not likely to be able to:

• Paint the walls any color you like. Landlords have an odd fascination with white. It can make you feel like you’re living in a sanitarium at times. Even those rare landlords who will allow you to paint the walls generally insist that you get all color schemes OK’d before you start painting. And what fun is that?
• Camp out in the Back Yard. First of all, most apartments don’t even have a back yard. And if they do, it’s generally way too small to camp out in. And even if you do have an apartment with a larger yard, the landlord might not want you pitching a tent there.
• Get a big dog. Or horse. Or polar bear, or any other kind of pet you want. Well, maybe you shouldn’t actually have a polar bear, whether you buy your own home or not, but you get the picture. Most apartments are too small for big dogs. And who wants a yappy assed little dog? A big house with a big yard gives you all the room you need for any kind of dog you want, and you won’t need to pay extra or ask the landlord’s permission to have him.
• Make some noise. There are some things you just can’t do in an apartment, even if there’s no specific rule against it, because the neighbors would complain and you’d be left discussing the noise with the landlord. As an example, you probably can’t start a garage band out of your apartment, even if you do happen to have a garage (which most apartments don’t). If you’re the drummer, you can’t even practice for your garage band in your apartment. Heck, you’ll be lucky if you get away with playing Rock Band on your PlayStation. We don’t know about you, but for us, this alone makes buying a home and homeowners insurance worth it.

You’ve dreamt all your life of owning your own home, and now you do. Congratulations. But before you start adding all of those features you’ve always wanted to have in your house and yard, consider the fact that some of them are going to cost you extra when it comes time to write out your check for homeowners insurance.

We’re not saying that you shouldn’t add anything you want to add. We’re just saying that you need to consider the ongoing costs before you do. With that said, here are some of the coolest things you can add to your home or yard that might cost you a bit extra on your homeowners insurance policy:

• A water feature. Whether it’s a small water garden, a waterfall, or a big pond, you can expect to shell out extra money anytime you add anything that involves water. You save some money if you put a fence around your water feature, but who really wants a chain link fence surrounding their waterfall?
• A trampoline. If you have kids, a trampoline is a lot of fun. Heck, even if you don’t have kids yet, a trampoline is a lot of fun. Unfortunately, they’re one of the main things insurance companies look for when determining how much of a risk your property represents. As with most hazards, you are much better off if your trampoline is fenced in.
• A tree house. Who hasn’t wanted a tree house since they were little kids? We recently heard of a man who built a $600,000 dream home which included two tree houses, one of which was to be used strictly for having Chardonnay and Brie with his buddies. We’re all in favor of tree houses. Insurance companies? Not so much.
• A pool. The deeper they are, the cooler they are. And the more they’ll cost you on your insurance policy. Make sure you put a fence with a locked gate around your pool or your insurance company may refuse to carry you altogether.
• A fireplace. There’s nothing better than curling up with someone you love next to a roaring fire. But while you see the potential for romantic evenings, your insurance agent sees the potential for a big payout after your house goes down in flames.

These days, record numbers are forsaking the notion of buying homes in favor of renting an apartment. Many are even abandoning homes they were buying as the market continues to look grim, leaving many homeowners upside down in their mortgages. But this exodus provides those who wish to own a home (and who don’t mind paying for property taxes and homeowners insurance) with an unprecedented opportunity.

The price of housing is as low as it is ever likely to get. Even if we were to see another hard recession, it is unlikely that the price of housing will go much lower than it is right now. Additionally, interest rates for mortgages are also at an all time low, giving home buyers a once in a lifetime opportunity to buy a home at a rock bottom price, with the added benefit of paying a very low interest rate.

This is especially attractive for those who are in a position to qualify for a shorter term mortgage. Those who are able to take out 15 year fixed mortgages are in a position to have a significant amount of positive equity in their homes without paying out a ton in mortgage interest. Home buyers who opt for a 15 year mortgage will generally find themselves well ahead of the curve by the fifth or sixth year of their mortgages.

Of course, if you decide to buy a home, you need to consider more than just your mortgage payment. There are several other expenses associated with owning a home, each of which should be added into your calculations when you are figuring out your living expenses. These include:

• Property taxes
• Homeowners insurance
• Utility bills
• Maintenance
• Home repairs

While none of these things should scare the average person away from buying a home, they are all things which need to be budgeted for. Home buyers should also be aware that, while they can currently deduct the interest on their mortgages from their income taxes, there is some speculation that this deduction could be taken away in the near future.

So, if you’re in a position to take advantage of the low prices and interest rates in the housing market today, do so. If you’ve ever wanted to be a homeowner, this is likely the best chance you’re ever going to get.