Louisiana P&C Adjuster Practice Exam

What type of fraud does Oswald's claim for car damage represent?

1. Hard fraud

2. Soft fraud

3. Negligent fraud

4. Intentional fraud

The correct answer is: Soft fraud

Oswald's claim for car damage falls under the category of soft fraud. Soft fraud, often referred to as "opportunistic fraud," typically occurs when a claimant exaggerates the details of a legitimate claim in order to receive a larger settlement than they would normally be entitled to. This could involve inflating the extent of damage or the value of lost items. In this case, if Oswald's claim involves some level of embellishment about the incident or the damage, rather than a total fabrication, it represents soft fraud. Hard fraud, in contrast, involves a complete fabrication of a claim or an intentional act designed to deceive the insurance company into paying for something that never occurred. Negligent fraud refers to situations where an individual fails to disclose relevant information or acts in a way that results in unintentional misrepresentation, which doesn't align with the implications of Oswald's claim if it involves intentional misrepresentation to some degree. Intentional fraud is closely tied to hard fraud and involves deliberate efforts to deceive, rather than exaggeration of a legitimate event. Thus, identifying the claim as soft fraud accurately reflects the nuance of the situation where there is an actual incident but possibly misleading details surrounding it.