By silicon.com, 22 November 2005 11:00
Many people are tempted to top up insurance claims. With the cost of insurance these days they might feel it's only fair to add a few CDs or an extra iPod to the claim. After all, they would have got stolen in the burglary - if they'd ever been bought in the first place.
Grabbing a bit back from the insurer is seen as a bit like cheating the taxman - naughty but not really bad.
In the past, insurers have had to just shrug and accept the claim because proving the customer wrong was pretty hard. Which meant that their costs went up - and premiums rose as well.
Which created a vicious circle - insurers up the costs of a policy, so more people feel the need to top up their claims to recoup a bit of the cost of insurance, forcing another price hike from insurers.
Nobody really benefits from this insurance inflation - especially not the people buying insurance but being lucky enough not to have to claim on it.
There is a bit of a 'Robin Hood' factor to getting one over on the insurer - which is why high-tech security is seen by some as giving the insurer an unfair advantage. But it's not a game.
If insurers can cut out fraud - which can be found in as many as one in five claims - they should be able to reduce their costs.
And if they can (and yes it's a big if) pass that back to the consumers, then anti-fraud technologies may benefit us all.
Comments
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1. Doctor Heat
i don't think they are primarily going after those who are topping up their claim with a few extra cd's. I would be interested to see how IT could help there...
they are going after actual fraud. big money claims that are completely fraudulent. staged accidents, staged burglery etc.
i agree wth the principle though - any savings should benefit everyone...
2. Richard
What about dodgy claims adjusters?
Some insurance companies wriggle out of paying "fair" compensation by employing complex small print and aggressive, dodgy claims adjusters who bulldoze genuine claimants into accepting lower settlements.
After a flood, my elderly parents were persuaded to accept a thirty percent reduction by the promise of a quick settlement: However, even this settlement was then much delayed.
Most coins have two sides!
3. Marc Wilson
I had a problem with a leaking roof- the insurers delayed payment several times, they moved offices, lost the paperwork, queried items that were clear and obvious- and eventually settled the claim 11 months after the event. Amusingly enough, this more-or-less coincided with the renewal letter- which I sent back with a letter saying: "I assume this is a joke?".
I think insurance companies should be obliged to pay interest at commercial rates on slow settlements- basically, they should have 30 days to cough up, and then the 8% compound interest should kick in. Even the taxman pays you interest when they're late.