World Cup 2026 Insurance Guide: How the biggest sporting event in North America is protected

By Michael Giusti

When the FIFA World Cup kicks off on June 11, 2026, it will be much more than a soccer tournament. Spanning more than five weeks and hosted across the United States, Canada, and Mexico, the event will bring together millions of fans, thousands of athletes and workers, and billions of dollars in economic activity.

The tournament will also represent one of the largest insurance undertakings in modern sports.

From protecting stadiums and athletes to insuring fan travel, business promotions, and short-term rentals, insurers will be involved in nearly every aspect of the competition. Behind every sold-out match, crowded airport, and packed sports bar is a web of policies designed to keep an unexpected event from becoming a financial catastrophe.

Just as no single player can win a World Cup alone, no single insurer takes on all the risk. Coverage is spread among multiple layers of insurers and reinsurers, with each taking a portion of the exposure.

Insuring a tournament that spans three countries

The World Cup presents challenges unlike almost any other sporting event.

Unlike the Super Bowl, which takes place in a single stadium on a single day, the World Cup unfolds over more than a month across dozens of venues in three countries. Every stadium, fan festival, transportation hub, training facility, and broadcast operation introduces its own risks.

Insurers must account for everything from severe weather and crowd injuries to cyberattacks, transportation disruptions, and terrorism concerns. They also must navigate different legal and regulatory systems.

As a result, FIFA, host cities, stadium operators, and sponsors typically rely on layered insurance programs. A primary insurer may cover the first layer of a loss, with additional insurers stepping in as costs increase. Reinsurers then absorb portions of the risk behind the scenes.

The first line of defense is the extensive insurance purchased by FIFA, stadium operators, and local organizing committees.

General liability policies protect against injuries to spectators and damage to property. Event cancellation and contingency policies help protect the enormous investments made long before the first ball is kicked.

If a match were delayed or relocated because of a security threat, natural disaster, or infrastructure failure, event cancellation coverage could help offset losses associated with venue preparation, staffing, ticketing, and broadcasting.

Host cities also carry their own liability concerns. Many will host public viewing areas, fan festivals, and outdoor celebrations that attract tens of thousands of visitors. Local governments and venue operators work with insurers and risk managers years in advance to develop emergency response plans, crowd-control measures, and evacuation procedures designed to reduce both danger and liability.

The tournament also benefits from federal protections. Should a certified act of terrorism occur, the federal Terrorism Risk Insurance Program would help backstop covered losses, similar to the way the federal government supports flood insurance markets.

What happens if someone gets hurt?

Whenever large crowds gather, injuries are inevitable.

A spectator who slips on a staircase, is struck by falling equipment, or is injured during a crowd surge may pursue a claim against the stadium or event organizers if negligence is involved. General liability policies are designed to respond to those situations.

At the same time, attendees should not assume the venue’s insurance will cover all their expenses. Personal health insurance remains the primary source of protection for medical treatment.

That consideration becomes especially important for fans traveling internationally. A U.S. health plan may provide limited coverage in Canada or Mexico, making travel medical insurance an important consideration for many travelers.

Professional athletes represent some of the most valuable assets in sports.

National teams, professional clubs, and players themselves often maintain a variety of insurance protections. Team-provided health insurance typically covers medical care, while disability insurance may provide benefits if an injury prevents an athlete from returning to competition.

Many elite players also purchase loss-of-value insurance. These policies help protect future earnings if a significant injury diminishes an athlete’s market value or contract prospects.

International travel introduces additional concerns. Teams frequently purchase specialized travel coverage, emergency medical evacuation protection, and assistance services to ensure players can receive treatment regardless of where they are competing.

While sports inherently involve injury risk, questions of liability can still arise. If an injury is linked to unsafe field conditions, negligent maintenance, or other preventable hazards, organizers or stadium operators could potentially face claims.

Travel insurance for World Cup fans

For many fans, the cost of attending the World Cup extends well beyond the ticket itself.

Flights, hotels, rental homes, transportation, and entertainment can quickly add up to thousands of dollars. Travel insurance helps protect those investments if plans change unexpectedly.

A typical travel insurance policy may cover trip cancellations, interruptions, travel delays, lost baggage, and emergency medical expenses. Coverage is especially valuable for travelers who book nonrefundable airfare or accommodations months in advance.

Travel insurance also can help when weather, airline disruptions, or international events affect travel plans.

However, timing matters. Travelers generally cannot purchase a policy after a disruption becomes a known event and expect coverage for that issue.

And no policy will cover you if your team fails to advance to the next round.

The World Cup is expected to create a surge in short-term rental activity in host cities.

Many homeowners see major sporting events as an opportunity to generate extra income. But turning a primary residence into a temporary rental can create insurance issues.

Standard homeowners policies often exclude or limit business-related rental activity. Property owners may need a home-sharing endorsement, landlord coverage, or a short-term rental policy to ensure they are properly protected.

Hosts should also temper expectations. Previous international tournaments have shown that anticipated demand does not always materialize evenly across all markets. Some property owners may invest heavily in upgrades expecting a rental windfall that never fully develops.

Insurance for businesses capitalizing on the World Cup

Bars, restaurants, and hospitality businesses may experience a significant increase in traffic during the tournament.

For many establishments, the biggest concerns are liability, property protection, and liquor liability coverage. A crowded watch party can create many of the same exposures as a major special event, from injuries to property damage and alcohol-related incidents.

Businesses running promotions tied to tournament outcomes may also consider prize indemnity insurance. For example, if a retailer promises free merchandise should Team USA win the championship, a prize indemnity policy can offset the cost of that promotion if the unlikely outcome occurs.

One area that surprises many businesses is FIFA’s aggressive protection of its intellectual property.

Using official logos, tournament marks, or language suggesting a formal connection to the World Cup can create legal exposure. A local business advertising itself as a “World Cup Watch Party” without authorization could find itself facing trademark-related claims.

For businesses looking to capitalize on tournament excitement, understanding what can and cannot be used is almost as important as understanding traditional liability risks.

Emerging risks in a global tournament

The 2026 World Cup will likely be one of the most digitally connected sporting events ever staged.

Ticketing systems, mobile applications, payment platforms, and broadcast operations all create opportunities for cybercriminals.

Cyber insurance has become an increasingly important part of major event planning. Organizers, vendors, sponsors, and hospitality providers may all carry policies designed to help respond to data breaches, ransomware attacks, and business interruptions caused by cyber incidents.

Ticket fraud also remains a concern. Fans should be cautious when purchasing tickets through unofficial channels, particularly as scammers become more sophisticated.

While the tournament takes place during summer, weather remains a significant variable.

Hurricanes, severe thunderstorms, flooding, extreme heat, and wildfire smoke all have the potential to disrupt matches, transportation, and outdoor events. Event organizers spend years developing contingency plans to address those risks.

Public health concerns have also become a larger consideration since the COVID-19 pandemic. While many insurers have tightened exclusions related to infectious disease outbreaks, organizers continue to evaluate public health risks as part of broader event planning efforts.

Not every World Cup fan will attend a match in person.

Millions will gather in homes, neighborhood clubhouses and community venues to watch the action. Homeowners and renters insurance may provide protection if a guest is injured, property is damaged, or an accident occurs during a watch party.

Hosts serving alcohol should also understand their state’s social-host liability laws. In some jurisdictions, a homeowner can be held partially responsible if an intoxicated guest causes injury after leaving the gathering.

Looking Ahead

The 2026 FIFA World Cup will showcase the world’s most popular sport on its biggest stage. It will also serve as a reminder of the enormous role insurance plays in making modern mega-events possible.

From protecting billion-dollar organizations and world-class athletes to helping travelers recover from canceled flights and lost luggage, insurance quietly underpins nearly every aspect of the tournament.

Most fans will never think about the policies operating behind the scenes. But without them, hosting a global event across three countries, dozens of venues, and millions of visitors would be nearly impossible.

As the countdown to kickoff continues, the World Cup stands as one of the clearest examples of how risk management and insurance have become as global as the game itself.

Michael Giusti, MBA, is an analyst with InsuranceQuotes.com

Summer weekends are the unofficial kickoff to the busiest travel and hosting season of the year.

Whether it’s a road trip, a flight across the country, or a backyard barbecue with friends and family, summer weekends come with a mix of excitement and risk.

Insurance may not be top of mind when planning the first getaway or cookout of the summer season. But with rising travel costs, extreme weather risks, and evolving liability concerns, it’s worth understanding how your coverage works before you head out.

What’s Covered in this Guide:

Summer Travel & Hosting Insurance Guide (2026)

• Travel, and Risk, is Back
• Away From Home
• Insurance-Proofing Your Summer Gathering
• Summer Insurance Takeaways

Estimated reading time: 6 minutes

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Travel, and Risk, is Back

Summer travel volumes stay heavy year after year, with millions of Americans hitting the road or taking to the skies each season. Fuel costs shaped by global instability and shifting supply pressures continue to influence the price of both driving and flying. Gas prices nationwide regularly top $4 a gallon, and can climb past $6 in some states.

That makes protecting your trip investment more relevant than ever.

For most travelers, a road trip starts with auto insurance. But not all coverage is created equal.

Liability insurance is required in most states and covers damage or injuries you cause to others.

Collision coverage pays for damage to your vehicle after an accident, regardless of fault.

Comprehensive coverage protects against non-collision risks like theft, vandalism, or weather damage.

Many insurance policies offer a roadside assistance add on, which can help with breakdowns, flat tires, or towing, which is especially useful during travel far from home.

Before hitting the road, it’s worth reviewing your policy limits and deductibles. A minor accident far from home can quickly become expensive if coverage is inadequate.

Away From Home

If you’re renting a car, your personal auto policy may extend to the rental. However, that doesn’t mean you’re fully protected.

Your existing policy’s deductible still applies, and any claim could impact your future premiums. Rental companies also charge for “loss of use” if the vehicle is out of service, which isn’t always covered.

For some travelers, purchasing the rental company’s coverage offers peace of mind, especially for short trips where avoiding a claim on your personal policy may be worth the added cost.

Air travel continues to face operational challenges, from staffing shortages to weather disruptions.

Recent industry shifts, including the closure of budget carriers like Spirit Airlines, have reduced capacity in some markets, potentially driving up prices and limiting alternatives when flights are canceled.

At the same time, global tensions and fuel price volatility are contributing to higher ticket costs. Summer weather patterns, particularly storms and extreme heat, can further increase delays.

Travel insurance policies typically cover trip cancellations or interruptions, travel delays and missed connections, lost or delayed baggage, and emergency medical expenses while traveling.

Policies are generally priced based on the total cost of the trip, traveler age, and coverage limits. For a typical domestic trip, coverage may cost 4% to 10% of the total trip value.

When it comes to trip insurance for air travel, coverage depends on the cause. Mechanical issues or weather are typically covered, while known events or voluntary changes may not be.

Travelers should also pay attention to airline policies. Many carriers offer rebooking flexibility during disruptions, which can reduce the need to file a claim.

Once you get to your destination, where you stay matters.

Hotels typically have standardized cancellation policies and may offer more flexibility. Short-term rentals, such as vacation homes, often come with stricter cancellation terms and larger upfront payments.

That’s where trip cancellation insurance becomes valuable.

Trip cancellation insurance is particularly useful for vacation rentals, where refunds may be limited if plans change.

Many policies also include a medical component, which can be important if you are traveling outside your normal provider network or internationally.

Insurance-Proofing Your Summer Gathering

Not everyone is traveling. For many, summer weekends are about hosting.

Backyard barbecues, pool parties, and neighborhood gatherings come with their own set of risks, as well as insurance considerations.

A standard homeowners policy typically includes liability protection if a guest is injured, medical payments coverage for minor injuries, regardless of fault, as well as property damage protection if something goes wrong, like a fire.

However, coverage has limits — and exclusions.

Some common party risks can include pool-related accidents, slip-and-fall injuries, fire hazards from grills or fireworks, and especially alcohol-related incidents.

If alcohol is served, social host liability becomes a key concern. In some states, hosts can be held responsible if an over-served guest causes injury or damage after leaving the event.

Homeowners insurance may provide some protection, but limits vary. For larger gatherings, an umbrella policy can add an extra layer of liability coverage.

If the party is in a public space, some special considerations may be called for.

If someone is hosting a cookout at a park or public venue, permits may be required, and the venue may not assume liability for your event. In some cases, you may need a separate special event insurance policy to cover potential risks.

Depending on your plans, hosts may want to consider umbrella insurance policies, which offer higher liability limits.

Stand-alone special event insurance policies are available and appropriate for larger gatherings.

Whether these extended coverages make sense depends on your risk tolerance, budget, and the scale of your plans.

Summer Insurance Takeaways

Summer weekends kick off the busy travel and hosting season, but they’re also a reminder of how quickly plans can change.

Between rising travel costs, evolving risks, and increasingly complex insurance policies, preparation matters. A quick review of your coverage before you travel or host can help ensure that a delay, accident or unexpected event doesn’t turn into a financial setback.

Before a summer road trip, it makes sense to review your auto insurance and understand rental car coverage gaps. Depending on the destination, travelers may do well to consider travel insurance for expensive or nonrefundable trips, and they should check cancellation policies for hotels vs. home rentals.

Travelers should also be aware of airline disruptions and have plans for if things go awry. And they should make sure their homeowners policy can handle hosting risks, and consider additional liability coverage for larger events.

In most cases, the goal isn’t to buy more insurance. It’s to understand the coverage you already have, and where the gaps might be.

Because when the grill is hot and the road is calling, the last thing you want to worry about is what happens if something goes wrong.

Michael Giusti, MBA, is an analyst for InsuranceQuotes.com

It could be a staged accident, or it could be misinformation on an insurance form. Either way it is insurance fraud.

Insurance fraud is widespread, costly and sometimes easier to commit than consumers realize. It affects nearly every policyholder through higher premiums, more difficult claims reviews and reduced trust in the insurance system.

According to the Coalition Against Insurance Fraud, insurance fraud costs American consumers at least $308.6 billion each year and occurs in about 10% of property-casualty insurance losses. The North Carolina Department of Insurance estimates that the cost comes out to nearly $3,800 a year for a family of four.

For consumers, understanding how insurance fraud works is more than a legal issue. It is a financial protection issue. Knowing the warning signs can help you avoid becoming a victim, and knowing what counts as fraud can help you avoid accidentally putting your coverage at risk.

Key Takeaways

• Insurance fraud happens when someone intentionally deceives an insurer to receive a benefit they should not receive.
• Hard fraud includes deliberate schemes, such as staged accidents, fake thefts or arson committed for an insurance payout.
• Soft fraud includes exaggerating a legitimate claim or providing false information on an insurance application.
• Consumers can be victims of staged accidents, ghost agents, fake policy documents and medical identity theft.
• Accurate applications, strong documentation and verified agents are some of the best ways to protect yourself.

What’s Covered in this Guide:

Insurance Fraud

• Key Takeaways
• What Is Defined as Insurance Fraud?
• Hard Fraud vs. Soft Fraud
• Common Types of Insurance Fraud
  • Staged Auto Accidents
  • Fake Injuries and Phantom Passengers
  • Ghost Insurance Agents
  • Shopping for Coverage?
  • False Information on Insurance Applications
  • Health Insurance and Medicare Fraud
  • Property Insurance Fraud After Disasters
• How Insurance Fraud Affects Consumers
• What to Do If You Suspect Insurance Fraud
• How to Avoid Accidentally Committing Insurance Fraud
  • Need to Update or Compare Coverage?
• How Insurers Detect Fraud
• Insurance Fraud Warning Signs
• Where to Report Insurance Fraud
• The Bottom Line on Insurance Fraud
• FAQs About Insurance Fraud

Estimated reading time: 12 minutes

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What Is Defined as Insurance Fraud?

Insurance fraud is the intentional act of deceiving an insurance company to receive money, coverage or another benefit that would not otherwise be paid. It can involve fake claims, staged accidents, exaggerated losses, false information on an application or scams involving fake insurance agents.

Insurance fraud usually falls into two broad categories: hard fraud and soft fraud.

Hard fraud involves a deliberate plan to create or fake a loss. Examples include staging a car accident, setting fire to property to collect an insurance payout or reporting a theft that never happened.

Soft fraud involves exaggerating or misrepresenting information connected to a real policy, application or claim. Examples include inflating the value of damaged property, underreporting mileage on an auto policy or failing to disclose that a vehicle is used for delivery work.

Both types are illegal and can carry serious consequences, including denied claims, policy cancellation, fines and criminal charges.

Hard Fraud vs. Soft Fraud

Type of insurance fraud	What it means	Example
Hard fraud	A deliberate scheme to create, fake or cause a loss	Staging a car accident to collect an insurance payout
Soft fraud	Exaggerating or misrepresenting details tied to a real application or claim	Inflating the value of stolen property
Ghost agent fraud	A scammer pretends to be a legitimate insurance agent	Selling a fake or canceled policy through social media
Application fraud	False or incomplete information is provided when applying for coverage	Not disclosing that a vehicle is used for rideshare or delivery work
Claims fraud	False or inflated information is added to a claim	Adding phantom passengers after a crash

Common Types of Insurance Fraud

Insurance fraud can happen across almost every type of coverage, including auto insurance, home insurance, health insurance, life insurance and business insurance. Some schemes are run by organized fraud rings, while others involve individuals making false statements or exaggerating claims.

Staged Auto Accidents

Staged accidents are among the most visible forms of insurance fraud. In these schemes, fraudsters intentionally cause or manipulate a crash so they can file claims for vehicle damage, medical bills or injury settlements.

The National Insurance Crime Bureau warns that staged accident fraud can involve organized groups and can cost the property-casualty insurance industry billions of dollars in paid accident claims.

One common staged crash setup is often called a “swoop and squat.” In that type of scheme, one vehicle abruptly cuts off another vehicle, forcing a collision, while accomplices may help box in the victim to make the crash more difficult to avoid.

Commercial drivers can be especially vulnerable because large trucks and fleet vehicles may be viewed as higher-value insurance targets. Many fleets now rely on dash cameras, telematics and strict documentation practices to protect themselves.

Fake Injuries and Phantom Passengers

Fraudsters may also claim injuries that never happened or exaggerate real injuries after a crash. Some schemes involve “phantom passengers,” which are people who were not actually in the vehicle at the time of the accident but later claim they were injured.

These claims can drive up the cost of auto insurance for everyone because insurers ultimately factor fraud losses into pricing.

Ghost Insurance Agents

Fraud is not limited to the accident scene. It can also happen when policies are sold.

“Ghost agents” are scammers who pose as legitimate insurance representatives. They may sell fake policies, alter real policy documents or collect premiums from consumers and then disappear.

Some ghost agents reach out through social media, unsolicited phone calls, text messages or online ads. They may offer unusually cheap coverage, ask for direct payment or request personal information that can later be used for identity theft.

A good rule of thumb: If you did not contact the agent through an official channel, verify the agent and policy directly before paying. You can check an agent’s license through your state insurance department and confirm coverage directly with the insurance company.

Shopping for Coverage?

Compare quotes through trusted insurance sources and verify your policy before you pay. InsuranceQuotes.com can help you compare coverage options from licensed insurance providers.

False Information on Insurance Applications

Not all fraud starts with a dramatic scheme. Some of it begins with an application.

If a consumer knowingly provides inaccurate information to get a lower rate or qualify for coverage, that can be considered soft fraud. Examples include:

• Underreporting annual mileage on an auto policy
• Leaving a regular driver off a policy
• Failing to disclose rideshare or delivery app use
• Misrepresenting where a vehicle is primarily garaged
• Failing to disclose prior claims
• Not mentioning that a home is used as a short-term rental
• Misrepresenting tobacco use on a life or health insurance application
• Downplaying risky hobbies or business activities

Even small misstatements can create major problems later. If an insurer discovers inaccurate information after a claim, the company may deny the claim, cancel the policy or decide not to renew coverage.

Health Insurance and Medicare Fraud

Health insurance fraud can happen at both the consumer and provider level. Common examples include billing for services that were never provided, billing for a more expensive service than the one performed, using someone else’s identity to obtain care or submitting false medical claims.

Medicare fraud is especially costly. The Senior Medicare Patrol Resource Center estimates that Medicare loses about $60 billion each year to fraud, errors and abuse.

Consumers can help protect themselves by reading explanation of benefits statements, watching for unfamiliar providers or services and reporting suspicious charges.

Property Insurance Fraud After Disasters

Property insurance fraud often spikes after major storms, fires or other disasters. Common examples include claiming pre-existing damage as storm damage, inflating the value of lost property or intentionally damaging property to collect an insurance payout.

Contractor fraud can also become a concern after disasters. Homeowners should be cautious with contractors who demand full payment upfront, pressure them to sign over insurance benefits or promise to “cover” a deductible in a questionable way.

How Insurance Fraud Affects Consumers

Insurance fraud is not a victimless crime. It affects pricing, availability and trust across the insurance system.

When insurers pay fraudulent claims or spend more money investigating suspicious activity, those costs can be reflected in premiums. Fraud can also lead to stricter underwriting, more documentation requirements and longer claims reviews for honest policyholders.

For consumers, the impact can include:

• Higher insurance premiums
• More difficult claims reviews
• Denied claims if an application contained inaccurate information
• Policy cancellation or nonrenewal
• Identity theft risk from fake agents or medical fraud
• Reduced trust between consumers, insurers and providers

That is why fraud awareness matters whether you are buying a new policy, filing a claim or reviewing your insurance documents.

What to Do If You Suspect Insurance Fraud

If you are involved in an accident and something feels off, start by documenting everything. This is helpful after any accident, but it is especially important if you suspect fraud.

1. Take photos and videos. Capture vehicle positions, damage, license plates, road conditions, traffic signals and the surrounding area.
2. Look for witnesses. Get names and contact information from anyone who saw what happened.
3. Call law enforcement. A police report can help document the facts and create an official record.
4. Avoid admitting fault at the scene. Stick to the facts when speaking with other drivers, witnesses and responding officers.
5. Tell the officer if you suspect fraud. Share specific observations, not assumptions.
6. Notify your insurer. Insurance companies have claims professionals and investigators who can review suspicious details.
7. Keep every document. Save claim forms, medical bills, repair estimates, texts, emails and policy notices.

The more documentation you have, the better positioned you will be if someone files a fraudulent claim against you.

How to Avoid Accidentally Committing Insurance Fraud

Some consumers think insurance fraud only means staging a crash or inventing a claim. But inaccurate information on an application or claim can also create serious problems.

To reduce your risk, follow these steps:

• Be accurate on applications. Answer questions truthfully, even if the correct answer may increase your rate.
• Update your insurer when your situation changes. Tell your insurer if you move, add a driver, start using your car for business or rent out your home.
• Do not exaggerate a claim. Claim only the damage or loss that actually occurred.
• Review policy paperwork. Make sure your coverage, vehicle information, address and listed drivers are correct.
• Verify agents before paying. Confirm licenses and coverage directly with the insurer.
• Keep records. Save receipts, photos, maintenance records and communication with your insurer.

If you are unsure whether something should be disclosed, ask your insurer or agent before a claim happens. It is better to correct policy details upfront than to discover a coverage problem later.

Need to Update or Compare Coverage?

Life changes can affect your insurance needs. If your driving habits, home use or coverage needs have changed, comparing quotes can help you find the right fit.

How Insurers Detect Fraud

Insurers are investing heavily in fraud detection. Many use claims data, historical patterns, investigative teams, inspections, forensic analysis and artificial intelligence to identify suspicious activity.

For example, fraud detection tools may flag repeated claims involving the same people, suspicious timing of policy changes, inflated repair costs or medical billing patterns that do not match the facts of a claim.

But technology cuts both ways. While artificial intelligence can help insurers detect fraud more quickly, scammers may also use AI tools to create convincing fake documents, phishing messages or fraudulent policy paperwork.

That makes consumer awareness an essential line of defense.

Insurance Fraud Warning Signs

Watch for these red flags when buying coverage, filing a claim or dealing with someone after an accident:

• An agent contacts you unexpectedly and offers a price that seems too good to be true
• You are asked to pay premiums through a personal payment app or direct transfer
• The agent will not provide a license number or official insurer contact information
• Policy documents contain errors, strange formatting or unfamiliar company names
• A driver, passenger or witness pressures you not to call police after a crash
• People appear at an accident scene claiming injuries even though they were not in the vehicle
• A contractor pressures you to sign documents immediately after a storm
• A medical bill or explanation of benefits includes services you did not receive

If something feels suspicious, slow down, document everything and verify the information through official channels.

Where to Report Insurance Fraud

If you suspect insurance fraud, report it as soon as possible. Depending on the situation, you may need to contact:

• Your insurance company’s claims or fraud department
• Your state department of insurance
• Local law enforcement
• The National Insurance Crime Bureau for suspected insurance fraud
• Medicare or Senior Medicare Patrol for suspected Medicare fraud

Do not confront someone you believe is committing fraud. Instead, gather documentation and report your concerns to the appropriate organization.

The Bottom Line on Insurance Fraud

Insurance fraud affects more than insurance companies. It affects policyholders, families, businesses and anyone who depends on insurance to recover after a loss.

For consumers, the best protection is a mix of honesty, documentation and verification. Be truthful on insurance applications. Review your policy documents. Keep records when you file a claim. Verify agents and insurers before paying. And if something seems suspicious, report it.

In an environment where insurance fraud adds real costs to household budgets, awareness is not just helpful. It is financial protection.

FAQs About Insurance Fraud

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Michael Giusti, MBA, is an insurance fraud & risks research analyst with InsuranceQuotes.com.

The cannabis industry continues to grow, but not without some problematic flash points in the first half of 2026.

For starters, the global cannabis industry is expected to reach $102.7 billion in 2026 and $428.2 billion by 2032, according to Fortune Business Insights, while support for legalizing cannabis stands at 87%.

The global cannabis insurance market is growing at a similar pace, with the industry expected to rise to $6.7 billion by 2032, at a 14% compound annual growth rate.

See last year’s 2025 cannabis business insights report to compare new growth within the industry.

“The cannabis industry has entered a more professionalized stage,” said Cimone Casson, a licensed insurance agent at Cannas Capital in Grand Rapids, Mich., in a recent research note. “Global legalization momentum continues, with countries like Germany and Australia advancing reforms, yet U.S. federal legalization remains uncertain, leaving businesses in a patchwork of compliance rules. For insurers, this means balancing risk with opportunity.”

Areas of opportunity and concern have also emerged with cannabis sector growth, with Cassone citing three key industry issues rising, as the cannabis industry “needs insurance more than ever.”

• Operational Risks Intensify: “Cultivation facilities face fire hazards, theft, crop failure, and regulatory scrutiny,”  Casson said. “Losses from indoor facility fires alone can be staggering.”
• Professionalization Pressure: “Securing insurance is now seen as a benchmark of credibility for cannabis businesses,” Casson added.
• Rising Premiums & Stricter Underwriting: “Insurers are tightening standards, making coverage harder to obtain but more valuable,” Casson stated.

With those industry needs in mind, here are the key flash points between the cannabis and insurance industries.

Cannabis rescheduling is heating up

There’s movement on marijuana rescheduling talks from Schedule I to Schedule III with the Trump administration right now

“A blueprint is currently being developed by a patient-first coalition outlining recommendations for medical cannabis,” said Matthew Myro Rothman, chief science officer at Cannalnx by EM2P2, a cannabis health services provider. “That framework is expected to be submitted to the administration ahead of a formal cannabis commission, which is anticipated to launch this summer. The goal is to complete the bulk of the rescheduling work before the fall.”

There are ongoing discussions about the rescheduling initiative, but as of now, no final change has been implemented. “For insurers, the practical reality remains the same,” said  Spencer Mio, client advisor at Acrisure in Detroit, Mich. “Cannabis is still treated as a federally illegal operation for underwriting and banking purposes, which continues to limit carrier participation and capacity despite state‑level legalization.”

Farm bill, illegal hemp, and the commercial and insurance impact

For years, hemp products have existed in a legal gray zone, becoming widely available, lightly regulated, and often misunderstood. That’s now changing quickly in Washington, D.C., and the ripple effects could hit not just consumers but also insurers, retailers, and even homeowners.

At the center of that shift lies the Agriculture Improvement Act of 2018, better known as the 2018 Farm Bill, and a new federal push to tighten the rules around hemp-derived THC products. That legislation legalized hemp nationwide, as long as it contained no more than 0.3% delta-9 THC, the primary psychoactive compound in cannabis.

Congress’s narrow definition created an unintended workaround. Cannabis manufacturers began producing compounds like Delta-8 THC (a chemically altered version of THC), THCA flower (which converts to THC when heated), and THC-infused drinks and edibles derived from hemp. Because these products technically complied with the “delta-9 only” rule, they spread quickly; often sold in gas stations, smoke shops, and online with minimal oversight.

Now, federal lawmakers are moving to close that loophole in a 2025 federal measure, separate from the pending Farm Bill, redefining hemp to include “total THC,” not just delta-9. That means all THC variants (delta-8, delta-9, THCA) are counted together, and synthetic cannabinoids are effectively banned

Insurers will have to get a firm grip on the new reality that numerous products currently sold as “legal hemp” would no longer qualify as legal under federal law starting in late 2026.

“As of now, there is no clear definition of how a potential hemp ban or closure of the Farm Bill loophole would be implemented,” Rothman noted. “These issues are expected to be addressed as part of broader federal cannabis discussions taking place this summer. Insurers should closely monitor the findings of the commission and any resulting regulatory guidance.”

State-level cannabis guidance continues to be formulated

State legislative activity on cannabis remains mixed, with some states expanding adult‑use or refining regulatory structures, while others continue to stall or reverse course. “This patchwork environment requires insurers to underwrite on a state‑by‑state basis, factoring in licensing protections, enforcement posture, and regulatory maturity,” Mio said.

Other cannabis experts say the insurance market is seeing some momentum, but also some fragmentation.

“Some states are advancing adult-use programs, while others are rejecting or stalling legislation,” said Dr. Priyanka Sharma, co-founder and co-CEO of Kazmira Therapeutics in Denver, Col.“What’s notable is that even in states where legalization fails, public support continues to rise.”

The market is also seeing states shift focus from expansion to tightening existing programs. “That’s mainly through stricter licensing, enforcement, and product standards, which adds another layer of complexity for operators and insurers,” Sharma said.

For 2026, the end result is a long-term trajectory toward expanding the cannabis insurance market. “Yet in the near term, operators and insurers must navigate a patchwork system, not a unified market,” Sharma added. One exception is that some states are implementing the new federal definition of hemp ahead of the November, 2026 deadline,” Sharma noted.

Cannabis business insurance trends and best practices

Insurance industry cannabis coverage options have expanded modestly over the past year, but cannabis insurance remains highly specialized, with these channels being the most prominent.

Cultivators: Property and crop coverage remains limited, with most policies only covering named perils rather than full crop failure.

Manufacturers and retailers: Product liability, contamination risk, and recalls remain top concerns. “That’s especially the case given recent attention on testing inconsistencies,” Mio noted.

Adult‑use vs. medical: Medical operators generally face slightly broader carrier appetite. “That’s due to tighter regulations and lower perceived loss frequency,” Mio added.

Non‑plant‑touching businesses: These policies are often easier to insure, “but exclusions tied to cannabis revenue and contracts must be reviewed carefully,” Mio said.

Audits: Insurance audits are “pushing companies toward higher operational discipline, which is ultimately a good thing,” Sharma said.

Retailers and Brands: There’s more availability in general liability and product liability, but premiums reflect the uncertainty of the regulatory environment,” Sharma noted.

Cannabis models: Policy-wise, a growing area to watch is regulated, medical-oriented cannabinoid models (e.g., compounding pharmacies or prescription-based frameworks). “This market may be viewed more favorably due to higher clinical oversight and documentation standards,” Sharma added.

Here’s how cannabis use is impacting personal insurance

The insurance industry has begun to enter the consumer side of medical cannabis, with more than a dozen personal insurance programs now offering some form of support for patients seeking reimbursement for medical cannabis purchases.

“That said, some of the more advanced models are already moving beyond theory,” Rothman said. “Platforms like CannaLnx by EM2P2 are helping connect patients, providers, insurers, and dispensaries within HIPAA-compliant frameworks, allowing certain employer-sponsored health plans to begin reimbursing medical cannabis as part of broader wellness benefits. Many of these programs are actually much more affordable than traditional health plans.”

More broadly, more than 100 insurance companies are actively evaluating how cannabis fits into their offerings. So far, early underwriting perspectives “have generally been favorable toward its therapeutic potential,” Rothman said.

Additionally, generalized cannabis personal insurance policies are an area where perception is evolving faster than policy. Here’s a capsule look.

Health insurance: Most health insurance providers still do not cover medical cannabis, largely due to federal classification. “That said, we may see incremental change if rescheduling progresses,” Sharma said. “Even with rescheduling, coverage would likely be gradual and limited, as insurers typically require FDA-approved products and established reimbursement pathways.”

Homeowners and renters insurance: Generally, cannabis products are treated like other personal property. “Yet coverage can be limited, especially if quantities exceed ‘personal use’ thresholds or violate local laws,” Sharma noted. “Coverage limitations often arise when cannabis is cultivated, stored in large quantities, or associated with business activity in the home.”

Auto insurance: Unlike alcohol, there is no universally accepted impairment threshold for cannabis, which creates additional complexity for insurers and enforcement.

“In this environment, Cannabis-related DUIs are becoming a bigger focus, but we’re not yet seeing a distinct ‘cannabis DUI insurance’ category,” Sharma said. “Instead, it’s being folded into broader impaired driving risk.”

Life insurance: Life policies are among the markets where consumers are seeing the most normalization. “Cannabis use is increasingly treated similarly to alcohol or tobacco, depending on frequency and disclosure,” Sharma added. “Disclosure remains critical; undisclosed cannabis use can still impact underwriting decisions or claims.”

Looking Forward Through the Rest of 2026

Of all the issuing changing cannabis companies right now, perhaps preparation from cannabis companies, or lack of it, is the biggest issue.

“I’ve been tracking the cannabis insurance market since California first legalized recreational use in 2016, and there’s one issue most business owners miss,” said Sam Meenasian, vice president of sales and marketing at USA Business Insurance. “In our view, standard general liability policies almost always exclude cannabis-related claims. I’ve seen dispensaries lose everything because they assumed they were covered.”

The cannabis businesses that survive in 2026 and beyond are the ones that treat insurance as infrastructure, not an afterthought. “They’ll work with carriers who actually understand the regulatory patchwork,” Meenasian noted. “Because it’s not just about having a policy, it’s about having one that pays out when you need it.”

International conflict can affect insurance costs in several ways. Travel insurance may become harder to use because of war exclusions and known-event rules, while fuel, shipping, and parts disruptions can also raise home and auto insurance costs over time.

Armed conflict is, first and foremost, a human tragedy. The loss of life, displacement of civilians and destruction of infrastructure is devastating with long-lasting repercussions. But as global conflicts unfold, they also create ripple effects that reach into everyday financial decisions, including how insurance works for travelers, homeowners, and drivers.

 The Iran War has underscored how quickly conditions can change.

Airspace closures across parts of the region have disrupted commercial flights, while reports of intercepted missiles as far away as Turkey highlight how geographically wide-ranging these risks can become.

For consumers, the implications are immediate. Trips are delayed or canceled, supply chains are disrupted, and insurance coverage becomes more complicated.

Estimated reading time: 7 minutes

Key Takeaways:

• Travel insurance may not cover war-related disruptions once a conflict becomes a known event.
• CFAR coverage can offer more flexibility, but it comes with limits.
• Supply chain and fuel disruptions can raise home rebuilding and car repair costs.
• Consumers should review exclusions and document delays or cancellations carefully.

What’s Covered in this Guide:

Table of contents

• What travel insurance covers during war or global conflict
  • When war exclusions usually apply
• What consumers should do before they travel or file a claim
• Can global conflict raise home insurance costs?
• Why auto insurance costs may rise during global instability
• Key takeaways for consumers
  • Comparison of Potential Insurance Impact & International Conflict
• Frequently asked questions about war, global conflict, and insurance

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What travel insurance covers during war or global conflict

If you are already traveling when conflict escalates, your options can be limited.

And timing matters.

Most standard travel insurance policies include coverage for trip interruption, which may reimburse unused portions of a trip or additional transportation costs if you need to return home early.

When war exclusions usually apply

However, many policies include exclusions for war or acts of war, particularly if the conflict was foreseeable at the time of purchase, and regardless of whether the action was an officially declared war or not.

In practice, this means coverage often hinges on when you bought your policy relative to when the conflict became a “known event.” Once an event is widely reported, insurers typically stop covering it as an unforeseen risk.

Travelers who find themselves stranded should first work with airlines and travel providers. Carriers often issue waivers during major disruptions, allowing rebooking without penalties. Travel insurance can then help fill in gaps by doing things like covering meals, accommodations, or alternative transportation, depending on the policy terms.

It’s also critical to keep documentation. Receipts, airline notices, and proof of delays can make the difference in whether a claim is approved.

What consumers should do before they travel or file a claim

For future travel, uncertainty becomes part of the equation.

Standard trip cancellation insurance typically covers specific, named perils, such as illness, severe weather, or certain emergencies. War is often excluded unless it directly impacts your destination in a way explicitly covered by the policy.

This is where “cancel for any reason” coverage comes into play. Cancel for any reason policies offer more flexibility, allowing travelers to cancel a trip for reasons not otherwise covered. However, they come with trade-offs, such as higher premiums, stricter purchase timelines, and partial reimbursements (often only 50% to 75% of trip costs).

And even CFAR has limitations.

CFAR policies usually must be purchased shortly after the initial trip deposit, and you may need to cancel a certain number of days before departure to qualify.

Travelers should also review supplier policies. Airlines, hotels, and tour operators may offer refunds or credits in response to geopolitical instability, even when insurance does not apply.

Unlike some other types of insurance, travel insurance pricing is not always dramatically higher for destinations perceived as higher risk. Instead, premiums are more commonly driven by trip cost, traveler age, and coverage limits.

That said, destinations with a history of instability may come with more exclusions or stricter underwriting. Insurers may limit coverage for certain regions or decline to offer policies altogether once tensions escalate.

In other words, the cost may not always rise, but the availability and scope of coverage can shrink.

Can global conflict raise home insurance costs?

While travel disruptions are the most visible effect of conflict, the longer-term financial impact often shows up closer to home.

Global conflicts can disrupt energy markets, driving up fuel prices. Higher fuel costs, in turn, increase the cost of transporting goods, including construction materials used to repair homes. At the same time, supply chain disruptions and ongoing tariff pressures can make materials like lumber, steel, and electronics more expensive or harder to source.

For homeowners insurance, this translates into higher replacement costs. If it becomes more expensive to rebuild a home after a fire or storm, insurers must adjust coverage limits and premiums accordingly.

Why auto insurance costs may rise during global instability

Auto insurance is similarly affected. Modern vehicles rely on complex global supply chains for parts, from semiconductors to specialized components. When conflicts disrupt those supply chains, repair costs rise. Even relatively minor accidents can become more expensive due to parts shortages or delays, which can ultimately push premiums higher.

Beyond travel, home, and auto, several other types of insurance are sensitive to geopolitical instability.

When it comes to commercial insurance, businesses that rely on global supply chains may face higher costs or delays, leading to more claims under business interruption policies.

With marine and cargo insurance, shipping routes may be rerouted or delayed due to conflict zones, increasing risk and insurance costs.

Key takeaways for consumers

While the specifics of any one conflict will vary, several consistent principles can help consumers navigate uncertainty:

Timing is critical. Insurance is designed for unforeseen events. Once a conflict becomes widely known, coverage options narrow.

Read the exclusions. War and related events are often treated differently than natural disasters or other disruptions.

Consider flexibility. CFAR coverage, refundable bookings, and flexible travel arrangements can provide additional protection.

Expect indirect costs. Even if you’re not traveling, global instability can influence what you pay for insurance at home.

Document everything. In the event of a disruption, thorough records can significantly improve your chances of reimbursement.

Comparison of Potential Insurance Impact & International Conflict

Insurance type	Possible impact
Travel	Trip interruption issues, exclusions, known-event limitations
Home	Higher rebuilding costs from labor/material inflation
Auto	Higher repair costs from parts shortages and delays
Commercial	Business interruption and logistics-related exposure

Frequently asked questions about war, global conflict, and insurance

Looking ahead

Global conflicts are, unfortunately, not new. But in an interconnected world, their financial impact travels faster and farther than ever before.

For insurers, that means constantly reassessing risk in a rapidly changing environment. For consumers, it means recognizing that coverage is not static. It evolves alongside global events.

The most effective approach is not to predict the next disruption, but to build flexibility into your plans and ensure you understand how your coverage works before you need to rely on it.

Michael Giusti, MBA, is senior global insurance impact analyst for InsuranceQuotes.com

Wednesday, April 15, is Tax Day, the deadline for Americans to square their accounts with Uncle Sam. When filing your tax forms, it’s easy to overlook the insurance side of the tax equation, which doesn’t rank up there with annual income, capital gains, or income tax brackets as a taxpayer priority.

Yet maybe it should, financial experts say. That’s because taxes need to be factored in when completing key documents. For instance, health, home, auto, business taxes on insurers and insurance payouts, and making the most of your deductibles are all keys to a successful tax filing process.

How Insurance Affects Your Taxes in 2026

Insurance can affect your taxes in several ways depending on the type of coverage and how the premiums are paid. Some insurance premiums may be tax deductible, while certain insurance payouts may be taxable income. For example, self-employed individuals may deduct health insurance premiums, business owners can deduct many commercial insurance policies, and most life insurance death benefits are typically tax-free.

What’s Covered in the 2026 Tax Guide:

Table of Contents:

• How Insurance Affects Your Taxes in 2026
  • Key insurance tax rules for 2026 include:
  • Insurance Tax Treatment by Policy Type
  • These Are the Big-Ticket Insurance and Tax Issues in 2026
    • Taxes and healthcare
    • Medicare issues
    • Life Insurance Proceeds and Taxability
    • Here’s the deal on employer-paid disability premiums
    • Some insurance payouts are taxable
  • Businesses generally earn favorable insurance tax treatment
  • State and regional variation in insurance taxes
  • Don’t Make These Insurance and Tax Mistakes
    • Interstate moves
    • HSA contribution errors
    • General confusion about what’s deductible
    • Communications breakdown
    • Focus on the big picture
  • Insurance and Taxes FAQ’s

Estimated reading time: 11 minutes

Insurance companies are way ahead of policyholders on the tax front, particularly in maintaining robust operational margins, and insurers often pass tax burdens on to policyholders. “These hidden costs are hardly explained clearly by the companies,” said Tyler Rodgers, global risk and forensic asset investigations expert at Privin Network in Chandler, Arizona.  “Data shows that premium increases often correlate with new state-level insurance taxes targeting large providers.”

Rodgers said his firm monitors those trends to help clients anticipate an increase in overhead in their static holdings. “If you consider yourself efficient, you know that identifying these trends early avoids budget surprises,” he said.

These Are the Big-Ticket Insurance and Tax Issues in 2026

With taxes and insurance, some factors are bigger than others, especially with these ‘front burner’ issues that consumers and businesses need to understand, and the sooner the better.

Taxes and healthcare

 One of the biggest issues tax and financial advisory specialists see each tax season is healthcare, though many filers overlook it.

“Often, there’s a lack of knowledge on the part of the people about how their type of health coverage impacts their tax situation,” said Michael Benoit, an insurance expert and founder of Contractor Bond & Insurance.

For instance, if you’re getting insurance through your employer, it’s taken out of your paycheck before taxes, so this would reduce your taxable income. “Most of my contractor clients don’t have that luxury, and they’re paying with after-tax dollars, unless they set up their business structure to allow that,” Benoit said.

The same goes for health savings accounts, which are one of the most underutilized tools in the tax incentive realm. “With HSAs, contributions go in tax-free, they grow tax-free, and withdrawals for medical expenses come out tax-free,” Benoit noted. “I tell every eligible client to max their HSA accounts out because that triple benefit is hard to beat anywhere else in the tax code.”

Additionally, employer-sponsored premiums are usually pre-tax, so you’re not paying income tax on that benefit. “Even so, you’ve got to make sure it’s coded right on your W-2 form,” said Josh Katz, founder and lead CPA at Josh Katz CPA, based in Beachwood, Ohio. “HSAs are triple tax-advantaged, but people mess them up constantly by contributing when they’re not eligible or forgetting to keep receipts for medical expenses.”

If you purchased ACA marketplace coverage, you might’ve gotten premium tax credits that need to be reconciled on your return. “Also, if your income came in higher than you estimated, you could owe some of that credit back,” Katz noted.

The number one health insurance tax problem Benoit is dealing with right now is ACA subsidy clawbacks. “Clients who were receiving premium tax credits based on estimated income are discovering at tax time that they have made more than expected and the IRS wants that money back,” he said. “I’ve watched this blindside over the course of a few of my clients in the past two filing seasons.”

Another vexing issue is that rising premiums are also driving more people to HSAs, with less knowledge of contribution limits and withdrawal rules. “I’ve had clients accidentally put too much into their accounts and then have to pay a six percent excise tax penalty that they didn’t see coming,” Benoit said.

Medicare issues

Medicare premiums aren’t deductible unless you’re self-employed or itemizing medical expenses over 7.5% of AGI. “As for state penalties, California, Massachusetts, New Jersey, Rhode Island, and DC all have their own individual mandate penalties if you don’t have coverage,” Katz said.  “A lot of people don’t realize that and get hit with surprise state tax bills.”

Life Insurance Proceeds and Taxability

Most people think that life insurance is always tax-free, and in the most common case, they’re right on the money. “If you name a beneficiary and he receives the death benefit directly, that money comes without having to pay any federal income tax,” Benoit said. “I’ve been able to deliver that good news to more families than I could count in my 15 years in the business.”

There are exceptions that often catch taxpayers off guard. “If the policy gets paid into the estate rather than directly to a beneficiary, this adds to the gross value of the estate,” Benoit said. “Once that number passes the federal threshold, estate taxes set in and take a real bite.”

There are some scenarios with limited exceptions tied to interest or estate structure. “Disability coverage creates the most misunderstanding. If the employer pays the premium and doesn’t include it as taxable income, benefits are typically taxable,” said Jennifer Schaefer, president and CEO at JS Benefits Group in Newtown, Pa.

If the employee pays with after-tax dollars, benefits are usually tax-free. “While the federal mandate penalty is $0, several states still impose penalties for lacking coverage,” Schaefer noted.  

Here’s the deal on employer-paid disability premiums

If your employer pays the disability insurance premiums, any benefits you receive are taxable income. “If you pay the premiums with after-tax dollars, the benefits are tax-free,” Katz said. “Most people don’t think about this until they’re disabled and suddenly their disability check’s getting taxed and it’s not enough to live on.” Some employers also offer the option to pay premiums yourself post-tax, so benefits are tax-free. “I always recommend taking that option if it’s available,” Katz said.

Some insurance payouts are taxable

Property insurance payouts for losses are generally not taxable as long as they don’t exceed your basis in the property. “For example, if your house burns down and insurance pays you more than you had invested in it, the excess could be taxable as a gain,” Katz noted. “Business interruption insurance payouts are taxable as ordinary income since they’re replacing lost business income.”

As for deductions, health insurance premiums are deductible if you’re self-employed. “Mortgage insurance premiums were deductible in some years, but that deduction keeps expiring and getting extended,” Katz added. “Consequently, you need to check the current law. Long-term care insurance premiums are deductible within certain age-based limits if you itemize.”

The majority of life insurance death payouts are paid to the family tax-free. “In legalese, this cash is generally used as support to the left behind,” said Marcus Denning, senior lawyer with MK Law. “Siblings retain the entire check to their relatives, and there’s no need to run the risk of having the IRS cut a chunk of the core payout. Also, any interest earned is typically considered as normal income, and it needs to be included as an additional expense on tax returns.”

Businesses generally earn favorable insurance tax treatment

Business owners can deduct most commercial insurance premiums (including liability, property, and workers’ compensation) as ordinary and necessary business expenses. However, there is a big caveat.

“Although the tax treatment for insurance premiums has remained the same, the increased costs of reinsurance and general market conditions have been driving up the costs of premiums in most areas, which is raising the overall costs of doing business,” said Sam Meenasian, vice president of sales and marketing operations at USA Business Insurance, in Burbank, Cal. “For businesses with multiple locations, remote work can create nexus and compliance obligations that can affect payroll, income, and workers’ comp. Since tax treatment can vary widely, it is recommended that you seek the advice of a tax professional.”

Business leaders need to be especially careful when documenting and filing insurance information on their tax returns. “Improper documentation of HSA contributions means avoidable and significant tax penalties,” he said. “Failing to report employer-paid disability benefits is also a source of filing errors because these benefits are typically treated as taxable income. Small businesses often overlook premium tax credits, resulting in thousands of dollars in lost revenue.”

State and regional variation in insurance taxes

The differences between states on insurance tax issues are greater than most people realize. For instance, Katz said he works mostly in the Western States, and the rules vary by state. “For example, Oregon has no sales tax and still taxes insurance premiums,” he said. “California piles on other regulatory fees that drive costs that are higher than neighboring states.”

Katz often tells clients who operate across state lines to review their tax exposure in every state where they hold a policy. “I’ve had contractors assume that their coverage was the same everywhere and get surprised when they come to filing,” he noted.

Additionally, states like New York and California tend to bear the brunt of the most regulation, and this trickles down to the amount policyholders have to pay. “Meanwhile, states such as Wyoming and Nevada keep things on the lighter side when it comes to insurance products and taxes,” Katz added.

Don’t Make These Insurance and Tax Mistakes

Taxpayers should check with their accountants and/or financial advisors on the more nuanced issues that can lead to penalties and fees if they’re not addressed. These issues should be at the top of that list.

Interstate moves

For clients who move between states, individual mandate penalties remain a real source of confusion. “Some states enforce them, and some don’t, and it’s more work to keep track of which is which than most people put in until the tax bill arrives,” Benoit said.

HSA contribution errors

Too often, people contribute over the federal government HSA limit, or they contribute when they’re not eligible because they also have an FSA, or they went on Medicare partway through the year. “Those excess contributions get hit with a 6% excise tax every year until you withdraw them,” Katz noted.

General confusion about what’s deductible

Just as often, people think all their medical expenses and insurance premiums are automatically deductible. “The fact is, most aren’t unless you’re itemizing and clearing the7.5% AGI threshold, which most people don’t hit anymore with the higher standard deduction,” Katz added.

Communications breakdown

Most insurance tax errors stem from a breakdown in communication between the insurance broker and the accountant. “We check the integrity of these data streams to ensure every deduction is legally defensible and free of exaggerated claims,” Rodgers said. “Tax season requires an investigative mindset; consumers need to use their insurance records as a verified data stream to ensure they are not paying the insurance company’s tax burden or forgoing legitimate business deductions.”

Focus on the big picture

The biggest mistake Schaefer sees is tax filers who treat insurance as just a tax benefits conversation instead of a structural and tax conversation. “How you design that conversation matters,” she said.

Insurance and Taxes FAQ’s