What is insurance claims fraud?
Insurance claims fraud can occur in a number of different ways.
- Claims can be made for a loss or incident which never actually happened. For example, you claim for a watch which was stolen from your home when no theft actually took place
- Claims can be exaggerated or misrepresented. For example, you purchased an item for £3,000. But you tell your insurer that it cost you £5,000 and attempt to claim for this amount
- Claims can be made for loss, damage or injury which has been deliberately created in order to generate a claim and profit from it. For example, crash for cash schemes
- You suffer a loss (theft/damage for example) and then take out a policy after the event and try to make a retrospective claim
We looked at other types of insurance fraud which people can commit in a previous blog. As well as providing more information about how the insurance industry deals with insurance fraud and the penalties that those who commit insurance fraud can expect.
Will we see insurance claims fraud rise as the cost of living increases?
Unfortunately, it is likely that this will be the case. Cases of insurance fraud can rise in times of financial difficulty. And with rising energy prices, interest rates and costs of food and other goods, this is certainly a challenging period.
Some insurers are already reporting an increase in claims fraud believed to be linked to rising costs of living. Zurich recently reported a 25% rise in fraudulent property insurance claims when comparing Jan – May 2021 with 2022 figures. With items such as jewellery, TV’s and mobile phones amongst the most common items fraudulently claimed for.
Insurance fraud and insurance claims fraud unfortunately has a wider impact us on all, given that insurance premiums go up as insurers cover the costs associated with fraudulent activity.
It’s important to understand that insurance fraud is a crime. With those who commit it facing a range of penalties from criminal conviction and jail time to difficulty obtaining insurance in the future.
As always, we urge you to keep your insurance up to date and ensure that any insurance cover reflects your current situation and details. We’re here to support our current and prospective customers during these challenging times and you can contact our teams at Anthony Jones at any point to update any of your details or ask any questions you may have about your insurance cover.