As a claims representative, Beatrice should understand that insurance fraud

• A. Is the costliest white-collar crime in the U.S.
• B. Accounts for 25 percent of the P&C industry incurred losses.
• C. Costs roughly $40 billion per year, excluding health insurance.
• D. Costs each American family between $2,000 and $4,000 per year.

Answer: (C)

Understanding the scale of insurance fraud helps a claims representative recognize why vigilance is essential in every file. A commonly cited figure is that fraud costs roughly $40 billion per year, excluding health insurance. This estimate focuses on non-health lines—like property and casualty—and reflects the broad impact fraud has on claim costs, premiums, and the overall stability of the insurance system. Knowing this number reinforces why thorough investigation, evidence gathering, and suspicious-claim detection matter: catching fraud early can save money for all policyholders and keep premium levels fair.

The other statements tend to overstate or misstate the claim. While fraud is costly, it isn’t universally described as the single costliest white-collar crime, and estimates about what percentage of P&C losses come from fraud or how much each family pays annually can vary by source and year. The $40 billion figure, excluding health insurance, is a widely used benchmark that aligns with typical industry guidance.