Economic institutions and individual ethics: A study of consumer attitudes toward insurance fraud

Abstract

This paper explores the determinants of consumers' attitudes toward filing exaggerated automobile insurance claims. Using individual responses to a national survey, and building on the socioeconomic literature on attitude formation, the paper formulates and tests hypotheses regarding consumers' approval or disapproval of claims exaggeration. The study finds support for the hypotheses that the attitudes toward claims exaggeration of others' in one's state, one's own attitudes toward dishonesty in other settings, and perceptions of insurance institutions are related to attitudes toward filing exaggerated claims.