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What is insurance fraud?

Insurance fraud occurs when an insurer is deliberately misled. The aim of the fraudster is to obtain benefits from this deception. There are various forms of insurance fraud and not everyone who commits fraud actually sees himself as a fraudster. But reporting extra stolen items to the insurance company after a burglary is also fraud. As is claiming old damage when repairing your damaged car.

Insurance fraud is taken very seriously by insurers and a lot of time is spent on recognising, detecting and remedying it. If you are caught committing fraud, this can have serious consequences. Not only do you have to pay a standard fine, but you can also report it to the police. Committing fraud also makes it more difficult to take out new insurance at a later date.

insurance fraud

Examples of insurance fraud

The Dutch Association of Insurers has shown that most fraud is committed with liability insurance, home insurance and car insurance. Every year, thousands of insurance policies are applied for with false information and a lot of damage is wrongfully claimed. Besides the above examples of insurance fraud, there are many other examples. For example, when luggage is lost, it is common for people to lie about the contents of the suitcases. Fraudsters then declare expensive items which they actually did not have with them at all. It is also common to find photos of damage on the Internet, which are then used to submit false claims to insurance companies.

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Different types of insurance fraud

There are different forms of insurance fraud. Below are some examples of these different forms:

  • Committing fraud when applying for insurance

When applying for new insurance, fraud can be involved. This is, for example, the case when incorrect data is passed on. An insurer will always ask some questions before accepting the insurance application. Examples of these questions are whether an application has ever been merged by an insurer and whether it has ever happened that an insurance has been stopped. They also often ask whether there is a criminal record and whether there has ever been a driving disqualification. If these questions are not answered honestly, it is a case of insurance fraud.

  • Claiming more than the actual damage suffered

Fraud occurs when inaccuracies are reported in the reporting of damages. An example is when, after a burglary, more items are declared than have actually been stolen. False information is provided and the damage is hereby exaggerated, so that the insurer will compensate more.

  • Distorting facts and making false claims

Another form of fraud involves submitting false claims. Fraud occurs when, for example, a phone is reported stolen, whereas it has simply been lost. Also, facts about damages are regularly distorted in order to ensure that the damage suffered is covered by the insurance company.

  • Creating or being aware of damage

It often happens that, for example, a collision is staged or that someone deliberately bumps into something in order to receive money. In such cases, the insurer has to prove that fraud has taken place. A specialist is often called in to do this. He or she can quickly see that, for example, a burglary is not real and that someone has smashed a window themselves in the hope of receiving a payment. Often the window is broken from the inside instead of the outside.

The consequences of insurance fraud

Of course, there are consequences for committing fraud. For example, no compensation will be paid if it turns out that fraud has been committed. The costs will have to be paid in full by the insurer if, for example, an unjustified claim is made for a burglary. It is also allowed that the insurance company cancels the insurance with immediate effect. This means that you are no longer insured. You will also be registered in the database of the CIS Foundation as a fraudster. The data in this database is visible to all affiliated insurers, which makes it considerably more difficult to take out a new insurance. Moreover, you will probably have to pay a lot more for the new insurance than was previously the case.

Reporting insurance fraud

If you suspect insurance fraud, you can make an (anonymous) report to the CBV (Centre for Combating Insurance Fraud). This organisation offers insurers help in preventing and remedying fraud and is part of the Dutch Association of Insurers. Reporting can be done easily via the website [email protected] or by calling 070-333 85 00.

Challenging insurance fraud

Being suspected of insurance fraud can have major consequences. Not only in financial terms, but also being registered as a fraudster has major consequences, especially when it comes to future insurance policies. When the insurance company has decided to report a fraud, criminal sanctions may follow. In addition, a registration as a fraudster will not easily be removed from the system. If, in your opinion, the registration is not justified, you can choose to contest it. It is often useful to hire a lawyer for this purpose.

Insurance fraud penalties

Insurance fraud is being punished harshly. As of 2016, fraudsters must pay a minimum fine of 532 euros to SODA (Service Organisation Direct Liability). The costs incurred for investigations can also be recovered from the fraudsters. In addition, the insurer may also report the matter to the police. The companies do this when there is a very high amount of fraud or organised crime.

Investigation into insurance fraud

If an insurer suspects fraud, it must first be able to prove it. That is why investigations are always carried out when fraud is suspected. These investigations can be quite expensive, especially when an expert or an external investigation agency is hired. The costs will be recovered from the fraudster if it is proven that fraud has actually taken place. This is because no investigation would have had to take place and no costs would have been incurred if no fraud had been committed.

The limitation period for insurance fraud

Because fraudsters pose a risk of high costs for insurers, insurance fraud is certainly not taken lightly. Of all reports, a report of insurance fraud therefore remains on file the longest. The statute of limitations is about 8 years. During these eight years, the report remains visible for all affiliated insurance companies.

Car insurance fraud

Car insurance fraud is one of the most common forms of insurance fraud. If you get caught with this form of fraud, it can have major consequences. In most cases you will no longer be able to go to a regular insurer. De Vereende is one of the few insurers where you can probably go to, but the premium will be many times higher than with a regular insurer.

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