Car insurance fraud: what could be the consequences?
Car insurance fraud involves intentionally misleading your car insurance company. For example, by claiming more car damage than you actually suffered. Or by staging a collision so that you receive compensation. Car insurance fraud can have serious consequences. We explain it to you here.
#1 Your auto insurance coverage is denied
If you commit insurance fraud, you risk being denied coverage under your auto insurance policy. The insurer will then not pay compensation for your claim. It will even be the case that the entire claim is denied, when in fact only a small piece of fraud has occurred. Suppose you have been hit by another car. When reporting the car damage, you decide to also claim some old dents that you never had anything done about. It seems relatively harmless, but if your car insurance company discovers this, it may refuse to pay out your entire claim. Then you are left with more expenses than if you had not committed fraud.
# 2 Termination of your auto insurance.
Insurers take insurance fraud very seriously. Someone who commits insurance fraud they do not like to see as a policyholder. That's why they almost always terminate an auto insurance policy if insurance fraud is found. Do you have other current insurance policies with the same insurance company? If so, the insurer will assess whether they are going to terminate those as well. The reason your car insurance and any other insurance policies are terminated is because you have damaged the insurer's trust. The insurer can no longer be sure that you are complying with the agreed-upon insurance rule and therefore almost always chooses to terminate all current insurance policies.
#3 Registration of personal data in insurer fraud register
Does your auto insurer terminate your insurance? Then the insurer stores your information in their internal registry. Many people confuse this with a so-called "blacklist. However, there is no such thing as a blacklist. They do record it when and why they terminate insurance. This is to alert and keep their own organization alert. In this way they ensure that you cannot take out insurance again as long as you are still registered as a fraudster. Internal registrations are not visible to other insurers
#4 Registration with CIS Foundation
Foundation CIS stands for Foundation Central Information System. In their database they keep all insurance information that is important to share with insurers. If you are proven to have committed insurance fraud with your car you will receive a CIS registration. Your auto insurer then puts your personal information in the CIS database, along with the reason for registration. Other insurers and agents can view this data. The database aims to make any risks manageable for insurers and prevent fraud as much as possible.
With a CIS registration for fraud, it is often difficult to get a new car insurance policy. An insurer always checks the CIS database before accepting an insurance application. That way, he sees quickly enough whether you are registered or not. With a CIS registration you can actually only go to insurance company De Vereende. De Vereende specializes in insuring special risks. Because of their wide acceptance policy you can still get insurance, even with a CIS-registration.
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#5 Reporting to the Insurance Crime Control Center (CBV).
The CBV is a division within the Association of Insurers specifically to assist insurers in dealing with fraud and other forms of insurance crime. Insurance fraud can also affect your career. If you apply within the insurance industry or at a financial institution, chances are that the company will consult the CBV. If they see a report for insurance fraud, they may reject your application: after all, it doesn't make a very good impression.
#6 Financial implications
Of course, insurance fraud also has a number of financial consequences. First, you will pay a standard fine of €532. Second, the investigation costs incurred will be recovered from you. An insurer must be able to prove that insurance fraud has actually occurred. Therefore, if they suspect fraud, they conduct an investigation. These investigation costs can sometimes be substantial, especially if an outside investigation agency or an expert has to be hired. Finally, getting a new car insurance policy will be more expensive than usual. That means you will pay more premium than normal. You will also have to pay three months of premium in advance and pay a deposit to De Vereende. This deposit can be used by De Vereende to settle outstanding premium if you are late in paying.
#7 Reporting to the police
The last consequence is immediately the toughest: the auto insurer may choose to report it to the police. In practice, however, this does not happen very often. Of course, reporting is a big step and is usually only done if the fraud amount is very high or if organized crime is involved.
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