What can be the consequences of insurance fraud?

Insurers take insurance fraud very seriously. If an insurer suspects fraud, it may launch an investigation into the claim or the insurance application. If it is discovered that you have committed insurance fraud, this can have serious consequences. Here, we explain the consequences of insurance fraud.

#1 Termination of insurance

The insurer will almost always cancel the policy involved in the fraud. For example: you reported a broken cell phone as stolen while on vacation. If the insurer discovers this, there is a good chance they will immediately cancel your ongoing travel insurance. Do you have any other active policies with the same insurer? If so, they will assess whether to cancel those as well. By committing insurance fraud, you undermine the insurer’s trust. They can no longer be certain that you will adhere to the agreed-upon insurance terms, and therefore almost always choose to terminate all current policies. Insurance fraud thus affects all your insurance policies, not just the one with which you commit fraud.

#2 Coverage is denied

If insurance fraud is detected, an insurer will always refuse to pay the claim. It’s even possible that an entire claim will be denied, even though only a small portion of it involved fraud. Imagine that your home is burglarized. A number of items are stolen, including a television and some jewelry. When filling out the claim form, you decide to list an extra cell phone as stolen. A nice bonus, right? Not really, because if the insurer finds out, they can refuse to pay the entire claim. The insurer won’t cover the damage, and you’ll be left with a lot of expenses.

#3 Registration in insurer fraud register

If your insurance policy has been terminated due to insurance fraud, the insurer will record your information in its database. Many people confuse this with a so-called“blacklist.” Insurers do not maintain a blacklist of individuals, but they do record when and why an insurance policy was terminated. This is intended to alert their own organization and ensure that you cannot take out another policy with them. Internal records are not visible to other insurers.

#4 CIS registration

An internal registration is not visible to other insurers, but a CIS registration is. Foundation CIS stands for Foundation Central Information System. In their database they keep all insurance data that is important to share with insurers. Not only insurance fraud is registered, but also defaulters, a disqualification from driving or a criminal history. Insurers and agents can put this data into the national database. The database aims to make any risks for insurers manageable and prevent fraud as much as possible.

If you have a CIS record, it’s difficult to get new insurance. Before an insurer accepts an insurance application, they always check the CIS database. Are you listed for insurance fraud? If so, there’s a good chance they’ll reject your application. You are considered too high a risk for the insurer. With a CIS registration, your only real option is the insurance company De Vereende. De Vereende specializes in insuring unusual cases and risks. Thanks to their broad underwriting policy, you can still take out insurance even if you have a record of insurance fraud.