What is the penalty for insurance fraud?
Insurers are increasingly facing insurance fraud. In fact, a record number of cases of insurance fraud were recently identified. Insurers want to be tough on fraud. Therefore, the punishment for fraudsters is not amiss. But exactly what kind of punishment will you face if you commit insurance fraud?
Multiple penalties for committing insurance fraud
Punishment may sound very serious, but there are quite a few consequences to committing insurance fraud. Of course, it does depend on the nature and severity 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
When insurance fraud is established, the insurer will not pay compensation. In many cases, they will refuse to pay out the entire claim, even if only a small portion was fraudulent. For example, if your home was broken into and you declare a cell phone that was not actually stolen in the claim. If the insurer finds out about this, it may refuse to pay out the entire claim. Even if other items were actually stolen. Then you will be stuck with more expenses than if you had not lied about that cell phone.
A fine of €532.
Anyone who commits insurance fraud has been subject to a standard fine of €532 since 2016. This fine is claimed by Service Organization Direct Liability (SODA). The Union of Insurers created this fine to crack down harder on systematic fraudsters. Moreover, they hope to deter potential insurance fraudsters with this fine.
Paying research costs yourself
If an insurer suspects fraud, it must be able to prove it. This is why an insurer always conducts an investigation when it suspects fraud. These investigation costs can sometimes be substantial, for example if an external investigation agency or an expert has to be hired. Once the insurer has determined that fraud has indeed been committed, the investigation costs are recovered from the fraudster. Fair enough, because if the fraudster had not committed fraud, no investigation would have to be conducted.
A registration as a fraudster
While this may not sound like an immediate severe penalty, registration for insurance fraud has a major impact on your (future) insurance policies. First, you will be registered in the insurer's internal fraud register. This is for internal use only and is designed to alert the organization and ensure that you will not be able to purchase insurance there again.
Second, you will be registered in the database of the CIS Foundation. Unlike internal fraud registries, the CIS database is accessible to every member insurer. Foundation CIS stands for Foundation Central Information System. In their database they keep all insurance data that is important to share with insurers. The database aims to make any risks for insurers manageable and prevent fraud as much as possible. This means that not only fraudsters are registered, but also defaulters, people with driving disqualifications and people with criminal records.
Notification CBV
CBV stands for Center for Combating Insurance Crime. The CBV is a department within the Dutch Association of Insurers. This department was set up specifically to support insurers in tackling fraud and other forms of insurance crime. Reporting to the CBV is especially influential if you are applying within the insurance industry or at a financial institution. Companies within these industries will consult the CBV first. With a report for insurance fraud, you do not make a good first impression. They may also reject your application for this reason. Thus, insurance fraud can also affect your career.
Police report
The most severe penalty for insurance fraud is reporting it to the police. However, this does not occur very often in practice. An insurer does this particularly when the amount of fraud is very high or when organized crime is involved. These are relatively serious cases.
Punished for insurance fraud? Get insurance through Geennee.nl!
Have you committed insurance fraud and are unable to obtain new insurance? At Geennee.nl you can always take out insurance with De Vereende. De Vereende specializes in insuring special risks. You can easily calculate online an indicative premium for your insurance with De Vereende.
Calculate your insurance premium online!
We can be reached via chat, WhatsApp, phone or email
Questions? Contact us if you want to know more.
We are here Monday to Friday from 08:00 to 18:00.