What is the penalty for insurance fraud?
Insurers are having to deal with more and more insurance fraud. Recently, there has even been a record number of cases of insurance fraud. Insurers want to take strict action against fraud. Therefore, the punishment for fraudsters is not bad. But what kind of punishment do you get when you commit insurance fraud?
Multiple sentences for committing insurance fraud
Punishment may sound very serious, but there are many consequences to committing insurance fraud. Of course, it depends on the nature and seriousness 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
In the case of established insurance fraud, the insurer will not pay out any compensation. In many cases, they will refuse to pay the entire claim, even if only a small part of it has been committed fraudulently. For example, if your house has been broken into and you report a mobile phone in the claim that is not actually stolen. If the insurer discovers this, they can refuse to pay out the entire claim. Even if other items were actually stolen. Then you are stuck with more costs than if you had not lied about the mobile phone.
A fine of €532
Anyone committing insurance fraud has been subject to a standard fine of €532 since 2016. This fine is claimed by Service Organisation Direct Liability (SODA). The Dutch Association of Insurers has created this fine in order to tackle systematic fraudsters more harshly. Moreover, they hope that this fine will deter potential insurance fraudsters.
Paying for research costs
If an insurer suspects fraud, it must be able to demonstrate this. That is why an insurer always initiates an investigation when fraud is suspected. These investigation costs can sometimes mount up considerably, for example if an external investigation bureau or an expert has to be hired. Once the insurer has established that fraud has indeed been committed, the investigation costs are recovered from the fraudster. This is fair, because if the fraudster had not committed fraud, there would have been no need for an investigation.
A registration as a fraudster
Although this may not immediately sound like a severe punishment, a registration for insurance fraud has a major impact on your (future) insurance. Firstly, you will be registered in the insurer's internal fraud register. This is for internal use only and is intended to alert the organisation and ensure that you cannot take out insurance again.
Secondly, you will be registered in the database of Stichting CIS. Unlike the internal fraud registers, the CIS database is accessible to every affiliated insurer. Stichting CIS stands for Stichting Centraal Informatie Systeem. In their database they keep all insurance details that are important to share with insurers. The aim of the database is to make any risks manageable for insurers 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 past.
Notification CBV
CBV stands for Centre for Combating Insurance Crime. The CBV is a department within the Dutch Association of Insurers. This department was specifically established to support insurers in tackling fraud and other forms of insurance crime. A report to the CBV is particularly influential if you are applying for a job within the insurance sector or at a financial institution. Companies within these sectors will first consult the CBV. A report of insurance fraud does not make a good first impression. They may reject your application for this reason. Insurance fraud can therefore also have consequences for your career.
Police report
The most serious penalty for insurance fraud is to report it to the police. However, this does not happen very often in practice. An insurer will do this in particular if the amount of fraud is very high or if there is organised crime involved. These are relatively serious cases.
Penalty for insurance fraud? Take out an insurance through GeenNee.nl!
Have you committed insurance fraud and are you unable to take out a new insurance policy? At GeenNee.nl you can always take out insurance with De Vereende. De Vereende specialises in insuring special risks. You can easily calculate an indicative premium for your insurance with De Vereende online.
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