Insurers need to check that the claims they pay are real claims. Fraud is of concern to the industry and customers alike. Fraud is an extra cost that is borne by other insured’s. The more the industry can do to put off people making fraudulent claims, the more likely Fraud will be reduced.
It may be the claim which is fraudulent, or the period being claimed or the amount being claimed. So insurers use the following methods to combat fraud.
- Contribute claims information to a central claims register managed by an independent third party. This allows different insurers to see if the same person is making more than one claim at the same time or has a history of claims. It is possible for more than one loan to be covered by more than one policy. But making similar claims for the same period but reporting different details and circumstances would be odd. Making claims from different addresses. Exceptional number of claims from the same post code or using the same doctor or perhaps too many claims for one individual.
- Insurers can run a fraud department to investigate mortgage protection claims which contain certain fraud indicators.
- Employ investigators to carry out independent checks on information supplied.
Some insurers may use all three, if the costs justify this, whilst others may use only one or two.