Because diverting money from actual productive businesses that employ lots of people into the pockets of people who are going to spend the money on Lamborghinis

Because diverting money from actual productive businesses that employ lots of people into the pockets of people who are going to spend the money on Lamborghinis is net bad for society? Why care about insurance fraud if insurance is still profitable? Someone is paying for fraud and it’s basically the rest of society in the form of higher costs.