SPECIAL FEATURE: Insurance fraud ? a year round crime

Ryan Fowler

December 17, 2014

Insurance fraud is a diverse crime and can range from serious organised crime rings to ordinary people exaggerating genuine claims – telling a little white lie as no doubt many see it. After all, it doesn’t hurt anyone does it?

The quick answer is yes it does. The Association of British Insurance estimates that insurance fraud costs every UK policyholder on average an extra £50 a year on their annual insurance bill.

The insurance industry has spent millions on improving its fraud detection capabilities and specialist police units have been established, dedicated to tackling insurance fraud. Their efforts are paying off and it’s not just the organised crime rings that are being broken down. The less than honest ordinary policyholders are also being caught.

The Insurance Fraud Enforcement Bureau (IFED) recently reported that it had arrested nine men and women aged between 21 and 61 across England as part of an investigation into £450,000 worth of household insurance claims that are believed to have been repeated, exaggerated or completely made up.

The biggest claim was for jewellery, cash and electrical items supposedly worth around £60,000 which were reported stolen during a burglary at a house in London. The smallest involves a £1,750 claim for settees that were said to have been covered in paint when a man allegedly fell off a ladder while decorating his Essex living room.

Insurers’ claims teams are going to be on high alert to spot potential fraudulent claims as we enter the festive season.

Christmas Day is one of the worst days of the year for fire damage. Claims data shows an increase in fire claims of 120% compared with an average day as electrical sockets are overloaded, candles are left burning all over the house and Christmas puddings enthusiastically flambéed.

The same data reveals that New Year’s Eve as one of the worst days for accidental damage in the home with claims for spills on carpets, cigarette burns and damage to mobile phones and cameras at parties increasing 25%.

At this time of year, some householders may resort to telling that little white lie on an insurance claim to top up their bank account or swap new for hold. The trouble is that anyone who lies about losing or damaging household items is committing insurance fraud and could find detectives from the Insurance Fraud Enforcement Department on their doorstep.

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