With £1.3 billion being paid out to customers during 2018, fire is one of the most expensive categories of property insurance claims. The majority of claims are genuine, however property fraud is a significant and growing problem for Insurers.
ABI research shows that dishonest property insurance claims detected in 2019 rose 30% from the previous year, with a value of £124 million so it’s never been more important to spot a fraudulent claim. Fire claims fraud can be both domestic and commercial, and range from deliberately set fires to the exaggeration of losses. If you’re an insurer, what are the key fraud indicators that you need to watch out for, both when a claim is submitted and during the investigation? At Clyde & Co, we are regularly involved in advising insurers on potentially fraudulent fire claims and helping them navigate the claims process where fraud indicators are present. Based on our experience, we’ve created our to help insurers identify where insurance fraud might be present. We highlight key indicators of fraud and questions that insurers should consider when dealing with a fire claim. The tool also provides further guidance on what to look for and why it may indicate fraud. If two or more of the indicators apply to a claim, or if you are in any way suspicious or concerned, we recommend fully profiling and assessing that risk through a rigorous due diligence process. This will help ensure that honest policyholders are paid quickly, whilst bespoke investigations are carried out where cases warrant further validation. The number and cost of claims are rising, and are extremely expensive for insurers. We need to work together to tackle fraudulent claims and prevent the rising levels of falsified and exaggerated fire claims.
