Crop Insurance Fraud and Misrepresentations: Contemporary Issues and Potential Remedies

33 Pages Posted: 15 Jan 2013 Last revised: 4 Jun 2013

See all articles by Chad G. Marzen

Chad G. Marzen

Pennsylvania State University - Department of Insurance & Real Estate

Date Written: January 14, 2013

Abstract

Fraud in the federal crop insurance program has been currently estimated to cost taxpayers in the millions of dollars. Despite efforts by both private crop insurers and the federal government to combat fraud associated with claims in the program, crop insurance fraud, and misrepresentations associated with crop insurance policies, remain a significant issue of national concern.

This article offers a comprehensive examination of contemporary legal issues concerning the issue of crop insurance fraud and misrepresentations. Section I provides an overview of the contemporary problem of fraud in crop insurance and discusses the responses of both private insurers and the federal government to curb and combat waste, fraud and abuse in the program. Section II explores the variety of legal remedies to combat crop insurance fraud and misrepresentations among reported cases. In criminal law, the possibility of substantial criminal sentences (of up to 30 years in prison) and criminal prosecutions of crop insurance fraud serve as a deterrence to the commission of acts of fraud. Substantial monetary civil penalties also exist to deter fraud. In addition, misrepresentations in applications for crop insurance, particularly the misrepresentations of actual interests in crops, have led to cases where insureds cannot recover for damages due to covered causes of losses.

The current magnitude of fraud and abuse in the federal crop insurance program reflects the need for more aggressive action to further eliminate abuses to help ensure the federal crop insurance program remains a vital source of support for America’s farmers. In the light of the significant issue of fraud and/or misrepresentations associated with policies in the federal crop insurance program, Section III proposes several additional measures which can be implemented by legislation and by judicial interpretation to further combat fraud.

Suggested Citation

Marzen, Chad G., Crop Insurance Fraud and Misrepresentations: Contemporary Issues and Potential Remedies (January 14, 2013). William & Mary Environmental Law and Policy Review, Vol. 37, No. 3, 2013, Available at SSRN: https://ssrn.com/abstract=2200637 or http://dx.doi.org/10.2139/ssrn.2200637

Chad G. Marzen (Contact Author)

Pennsylvania State University - Department of Insurance & Real Estate ( email )

University Park, PA 16802-3306
United States

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