Fraudulent claims are a serious problem, although estimates of its impact vary widely.
The ABI (Association of British Insurers) detected £841 million of general insurance fraud in 2009. The U.K. Insurance Fraud Bureau (IFB) estimates undetected general insurance fraudulent claims total £1.9bBillion a year adding on average £44 to the annual costs individual policyholders face.
Clearly this is a problem that needs tackling.
Every claim we handle is considered to see whether there are signs of fraud. In motor claims for example, this can take many different forms. Some cases may involve staged accidents, bogus passengers and others may relate to exaggerated damage and loss.
The challenge in these cases is to identify correctly instances of fraud and once identified to deal with it is a cost effective way. We have found that many cases of fraud can be challenged along traditional lines by denying liability or defending issues of causation and loss and without a large rise in costs. Where this is not possible and fraud needs to be specifically pleaded we will advise our clients on the implications arising at all times.