What is the penalty for insurance fraud?
Insurers are increasingly facing insurance fraud. In fact, a record number of cases of insurance fraud were recently identified. Insurers want to be tough on fraud. Therefore, the punishment for fraudsters is not amiss. But exactly what kind of punishment will you face if you commit insurance fraud?
Multiple penalties for committing insurance fraud
Punishment may sound very serious, but there are quite a few consequences to committing insurance fraud. Of course, it does depend on the nature and severity of the crime. Large-scale insurance fraud carries a heavier penalty than lying on an insurance application. Insurance fraud can have the following consequences:
No claims payment
If insurance fraud is detected, the insurer will not pay out any compensation. In many cases, they will refuse to pay the entire claim, even if only a small portion of it involves fraud. For example, if your home is burglarized and you include a cell phone in your claim that wasn’t actually stolen. If the insurer finds out, they may refuse to pay the entire claim—even if other items were actually stolen. In that case, you’ll end up with higher costs than if you hadn’t lied about that cell phone.
A fine of €532.
Anyone who commits insurance fraud has been subject to a standard fine of €532 since 2016. This fine is claimed by Service Organization Direct Liability (SODA). The Union of Insurers created this fine to crack down harder on systematic fraudsters. Moreover, they hope to deter potential insurance fraudsters with this fine.
Paying research costs yourself
If an insurer suspects fraud, it must be able to prove it. This is why an insurer always conducts an investigation when it suspects fraud. These investigation costs can sometimes be substantial, for example if an external investigation agency or an expert has to be hired. Once the insurer has determined that fraud has indeed been committed, the investigation costs are recovered from the fraudster. Fair enough, because if the fraudster had not committed fraud, no investigation would have to be conducted.
A registration as a fraudster
Although this may not immediately sound like a severe punishment, being listed for insurance fraud has a major impact on your current and future insurance policies. First, you will be listed in the insurer’s internal fraud registry. This registry is for internal use only and is intended to alert the organization and ensure that you cannot take out another insurance policy with them.
Second, you will be registered in the CIS Foundation database. Unlike internal fraud registries, the CIS database is accessible to every affiliated insurer.The CIS Foundation stands for Stichting Centraal Informatie Systeem (Central Information System Foundation). In their database, they store all insurance data that is important to share with insurers. The database aims to make potential risks for insurers manageable and to prevent fraud as much as possible. This means that not only fraudsters are registered, but also defaulters, people with a driving ban, and people with a criminal record.
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Notification CBV
CBV stands for Center for Combating Insurance Crime. The CBV is a department within the Dutch Association of Insurers. This department was established specifically to support insurers in combating fraud and other forms of insurance crime. A report to the CBV is particularly significant if you are applying for a job in the insurance industry or at a financial institution. Companies in these sectors will first consult the CBV. A report of insurance fraud does not make a good first impression. They may also reject your application for this reason. Insurance fraud can therefore also have consequences for your career.
Police report
The most severe penalty for insurance fraud is reporting it to the police. However, this does not occur very often in practice. An insurer does this particularly when the amount of fraud is very high or when organized crime is involved. These are relatively serious cases.
Punished for insurance fraud? Get insurance through Geennee.nl!
Have you committed insurance fraud and are you having trouble getting new insurance? At Geennee.nl , you Geennee.nl always get insurance through De Vereende. De Vereende specializes in insuring special risks. You can easily calculate an estimated premium for your insurance with De Vereende online.
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