Question

Alex is nearly bankrupt and, in a moment of desperation, filed a false insurance claim. Besides being illegal, this false claim raises insurance rates for everyone and is a prime example of a

a) Fraudulent claim

b) Valid claim

c) Rejected claim

d) Partial claim

Answer 1

Alex's act of filing a false insurance claim is considered a fraudulent claim, which is illegal and leads to higher insurance rates for others. Fraudulent claims are deceptive attempts to benefit financially, contrasting with valid, rejected, or partial claims.

Step-by-step explanation:

The question asked involves identifying the type of insurance claim made by Alex. Since Alex filed a false insurance claim, the correct answer is a) Fraudulent claim. A fraudulent claim is a deliberate attempt to deceive the insurance company to gain a financial advantage. It is not only illegal but also contributes to the increase in insurance rates for all policyholders. In contrast to a fraudulent claim, a valid claim is a legitimate request for payment that the insured is entitled to under their policy terms. A rejected claim refers to a claim that an insurance company denies, while a partial claim is one where the insurance pays only part of the amount requested.