Simon McKean, Claims Manager for H&H Insurance Brokers, highlights the severe perils of getting caught out by a fraudulent claim.
According the Association of British Insurers (ABI), new data announced earlier this month shows just over 100,000 fraudulent insurance claims were uncovered in the UK in 2019 – to the tune of £1.2 billion.
Given the current climate, and with times of economic recession historically having led to big increases in insurance fraud, Simon McKean, Claims Manager for H&H Insurance Brokers, is keen to reiterate the considerable and long-lasting consequences a fraudulent claim can have.
Simon explains: “Insurance is by nature an industry built on trust, and I am pleased to say that here at H&H Insurance we have complete trust in our customers. Unfortunately, however, fraudulent claims are not uncommon and what I am keen to highlight is the severity of the repercussions. If caught out, the ramifications of a fraudulent claim cannot be understated - they can have serious impacts on an individual’s personal and professional life and their business for many years to come.
“In addition to consequences possibly leading to a prosecution and criminal record, one false claim has the potential to devastate an individual’s policies across their entire business. It can result in current policies being voided and future insurance becoming unattainable.”
“A hypothetical example of this may be someone who has carried out a range of farm diversification initiatives. If this person were to make one fraudulent motor insurance claim (such as being dishonest about who their main driver was on a car policy), and they were subsequently caught out, this fraudulent claim would void ALL their policies from their farm cottage to their farm shop, and from their public and employers liability to professional indemnity insurances. With insurance companies now tracking and tracing, the implications of such a claim would persist for many years to come.”
With the UK now officially in recession for the first time in 11 years, the current climate proves a real cause for concern for those in the industry in terms of potential fraud. Hard economic times in the past have invariably led to huge rises in fraudulent claims. This is because when a country becomes economically stressed, its people do also. Whether it is an opportunist willing to entirely fabricate a claim, or an individual keen to take advantage of a real claim but exaggerate their losses, fraudsters pose a real threat to the industry. They may even consider using the uncertainty and anxieties surrounding lockdown and social distancing to their advantage – from staging accidents to engaging in scams.
When considering what an individual can do to safeguard themselves from a potentially fraudulent claim, Simon says: “It is our job to present genuine claims for our customers, so transparency and disclosure is key. Disclosing all information to your broker will mitigate future problems, which includes any changes to your business. For example, for a farming and rural business, this may include the purchase of new farm machinery, the conversion of a farm building or an increase in livestock numbers.”
“Here at H&H Insurance Brokers we always go through each and every one of our renewals with the finest of toothcombs, to ensure our clients are safe from the threat of risk and so that they can trust us to protect them should any disaster strike. If you ever make changes to your business it really is essential that you pick up the telephone and ask for advice as to what changes need to be made to your policy, to ensure you are fully covered. It may be easy to forget, but this is not an excuse that any insurance company will accept.”