One in ten would commit insurance fraud
Filed under: Scams & Fraud
So what are they doing, and what are the risks?
FraudAccording to MoneySupermarket, one in ten have considered making a false home insurance claim. In fact, almost 780,000 people have already defrauded their home insurer by successfully making a false insurance claim in the last five years.
Men are the most prone to this particular criminal act, with 14% admitting they'd do it, compared to 8% of women. The young are also far more likely to do it - 21% of the under 35s compared to 10% of the over 45s.
There is a North-South divide in criminality, with people in the North East (15%) and North West (14%) most likely to make a false claim. Meanwhile, residents in the South East were the least likely to make a claim, with only 8% stating they'd be prepared to do so.
Peter Harrison, insurance expert at MoneySupermarket, said: "It's extremely concerning to discover so many people are contemplating making a false or exaggerated claim on their home insurance. With recent news the UK has slipped into a double-dip recession, household finances will undoubtedly be stretched, but no matter how tempting, fabricating a claim for a payout is illegal, and you could face being prosecuted as a result."
According to the ABI, the most common fraud likely to be considered is increasing the value of an item they are claiming for, or including other items in a claim. Around 45% of the fraud being considered is of this nature. Second most common is an exaggeration of the damage caused when claiming, which a third of people would consider. Far less common is the complete fabrication of the event being claimed for.
The risksWhile someone may feel an element of exaggeration is forgivable, insurance companies take a very different view. If insurers are suspicious of a claim's validity it will be investigated with specialist detection processes and anti-fraud technology.
Anyone caught and found guilty of insurance fraud would find it extremely difficult to get insurance cover in the future. Previous convictions for insurance fraud must be disclosed on application forms for any type of insurance and insurance premiums will be much more expensive for someone guilty of making a false claim - if they offer cover at all.
The implications can go further still. Harrison says: "For a homeowner, being declined buildings insurance would go against the terms of your mortgage, and for a driver, not having valid car insurance would leave them unable to take to the road as it's illegal to drive without valid insurance. The repercussions of making a fraudulent insurance claim are severe and I urge consumer not to take the risk."