Fraudulent claims - Onus on us all to stamp this out
The cost of insurance should also go down because the value of property has been declining, and the cost of cars, especially the more expensive cars, are also likely to drop.
Instead, however, insurance costs are more likely to go up. Figures released by the Central Statistics Office last week indicate that arson offences rose by almost 50% in the first quarter of 2009 over the same period last year. This is an alarming development, but hardly a surprise to insurance companies.
The Association of British Insurers reported that it had 107,000 fraudulent claims last year, totalling £730 million (€820m). This amounted to a 30% rise in fraudulent claims during 2008.
In this country FBD and AXA insurances companies have been bolstering their investigative teams in an effort to stem the bogus claims, as there has been a distinct increase in suspicious claims involving luxury cars, lorries and houses. They have no doubt that many claims are false, but proving it is a different matter.
During the boom people were tempted to buy luxury cars, or expensive vehicles, but now in the downturn they are having difficulty paying for them. There has already been a marked increase in insurance claims for stolen or burnt-out vehicles. There is also a surfeit of empty houses, apartments, and retail outlets.
In the present economic climate there is little chance of selling or even renting those at the kind of prices they would have commanded a couple of years ago. Hence some people are suspected of trying to take the easy way out with phony insurance claims.
A particularly dangerous type of claim involves deliberately engineering car accidents so that they can claim on a car as well as a bogus injury.
One investigator told of two people who lost out on false injury claims because the insurance company was able to demonstrate that they had reduced their golf handicaps by three shots each while they were supposedly suffering from whiplash.
Unfortunately society has been turning a blind eye to these kinds of things for too long. The ultimate cost has been a decline in our competitiveness. The explosion in the number of sick days being claimed is really just another variant of the insurance scams.
Some people have been inclined to look on insurance claims as a virtual open cheque book. For many years there was a practice whereby people carrying out repairs charged more if the customer was covered by insurance. This was grossly wrong.
Such scams are not a victimless crime. Innocent people are the real victims, because everybody’s insurance costs go up as a result. The person who makes a fraudulent claim is essentially stealing your money.
There is an onus on all of us to help stamp out this kind of antisocial behaviour.
