Exaggerated Home Insurance Claims Cost Homeowners

Exaggerated home insurance claims and increasing levels of ‘fraudulent’ behaviour by some cost honest homeowners and risk their own claim being entirely rejected.
AXA, a UK leading home insurer, believes exaggerated home insurance claims are costing every home some £13 a year on their home insurance premiums.
It has seen a rising trend in the last few years of “exaggerated” claims and this goes hand in hand with industry data reports indicating increasing amounts of ‘fraudulent’ behavior.
Recent consumer research also suggests that around 8% of claimants have added an average of almost £3,000 to the real cost of their claim.
Over a third of people would be likely or very likely to consider exaggerating a claim if they were to make one, while nearly half the population believe it’s either fair game or at worst “not too bad” to tell a few white lies when making an insurance claim.
Some 10% feel they can exaggerate a claim because “everyone does it”. Some even do so as they think insurance companies can afford it – showing a lack of appreciation of the impact on other policyholders who ultimately bear the cost on their home insurance premiums.
Men are considerably more likely to exaggerate a claim than women and the amount they exaggerate by is nearly twice that of their female counterparts.
By contrast, when people were asked whether they would commit other financially dishonest acts, only 3% would steal a packet of sweets from a newsagent and only 1% would tell someone they owed them more money than they really did.
Common areas of exaggeration include watches, where claims are made for a designer watch which in fact is a counterfeit bought abroad, and freezer food with people claiming to have had a freezer full of lobster and fillet steak rather than fish fingers and peas.
James Barclay, home underwriting manager at AXA says: “Exaggerated claims have always been an issue for insurers but over the last few years there has been a marked increase.”
He added “There are various measures we can use to check on claims and ultimately, people risk having the whole claim turned down if they submit fraudulent details. But we are keen to try and educate consumers that being honest will keep premiums down for everyone in the long run.”
MoneyHighStreet.com comment: As well as fraudulent claims, large number of households in the UK are underinsured with billions of pounds of contents at risk as a resul. On occasion householders knowingly underinsure, perhaps to try and save money in the short term on their home insurance premiums. Others unwittingly uninsure as they have not reassessed the value of their cotents for some time. Either way, the risk though is that claims made will not be paid.
Source http://www.moneyhighstreet.com/