What can be the consequences of insurance fraud?
Insurers take insurance fraud very seriously. If an insurer suspects fraud, they may investigate the claim or the insurance application. If it is discovered that you are committing insurance fraud, this can have serious consequences. We explain here what the consequences of insurance fraud are.
#1 Termination of the insurance
The insurance with which fraud has been committed is almost always terminated by the insurer. For example: you reported a broken mobile phone as stolen during your holiday. When the insurer discovers this, there is a big chance that he will terminate your continuous travel insurance immediately. Do you have other ongoing insurances with the same insurer? Then he will assess whether they are going to terminate these as well. By committing insurance fraud, you damage the trust of the insurer. They can no longer be sure that you comply with the agreed insurance rules, and therefore almost always choose to terminate all current insurance policies. Insurance fraud therefore affects all your insurance policies, not just the one with which you commit fraud.
#2 The cover is refused
In the event of established insurance fraud, an insurer will always refuse to pay the claim. It may even be the case that a whole claim is refused, while in fact only a small part has been defrauded. Imagine that your house is broken into. A number of things have been stolen, including a television and some jewellery. When filling in the claim, you decide to report an extra mobile phone as stolen. Nice, right? Not really, because if the insurer finds out, they may refuse to pay out the whole claim. The insurer will not reimburse the damages and you will be stuck with a lot of costs.
#3 Registration in insurer's fraud register
If your insurance is terminated due to insurance fraud, the insurer will save your data in their register. Many people confuse this with a so-called 'black list'. Insurers do not keep a black list of people, but they do register when and why an insurance has been terminated. It is intended to alert their own organisation and to ensure that you cannot take out insurance there again. Internal registrations are not visible to other insurers.
#4 CIS registration
An internal registration is not visible to other insurers, but a CIS registration is. Stichting CIS stands for Stichting Centraal Informatie Systeem. In their database, they keep all insurance data that is important to share with insurers. Not only insurance fraud is registered, but also defaulters, driving disqualifications or criminal records. Insurers and authorised representatives can enter this data into the national database. The purpose of the database is to make any risks manageable for insurers and to prevent fraud as much as possible.
With a CIS registration, it is difficult to take out a new insurance policy. Before an insurer accepts an insurance application, it always checks the CIS database. Are you registered for insurance fraud? Then there is a good chance that they will refuse your application. You then pose too great a risk for the insurer. With a CIS registration you can actually only turn to the insurance company De Vereende. De Vereende specializes in insuring special cases and risks. Because of their broad acceptance policy you can still take out insurance, even if you are registered for insurance fraud.
#6 A fine, investigation costs and a higher premium
Committing insurance fraud naturally also has financial consequences. For example, since 2016, SODA has been claiming a standard fine of €532. In addition, an insurer must be able to prove fraud. That is why they always investigate suspected insurance fraud. These investigation costs can sometimes mount up considerably, especially if an external investigation agency or expert has to be hired. If it is established that fraud has indeed been committed, the investigation costs will be recovered from the fraudster. If no fraud had been committed, there would have been no need to start an investigation and these costs would not have been incurred. Therefore, investigation costs are always for the account of the fraudster.
In addition, your new insurance will also be more expensive. As said, with a registration for insurance fraud you can only take out insurance with De Vereende. This does involve a number of extra costs. For instance, with De Vereende you pay a considerably higher premium for your insurance. Also, when taking out the insurance you must pay three months of premium in advance. Finally, you pay a deposit. De Vereende can use this deposit to settle outstanding premiums if you are late in paying.
#7 Reporting to the police
Finally, the insurer may choose to report the matter to the police. In practice, however, this is not often done. Insurers do this in particular when the amount of fraud is very high or when organised crime is involved.
Calculate your insurance premium online
We can be reached via Chat, Whatsapp, phone or email
Please feel free to contact us if you would like to know more.
We are available from Monday to Friday from 08:00 to 18:00.