What is Insurance Fraud?

Insurance fraud occurs when a person deliberately tries to obtain an unjustified financial gain from an insurance company. This can happen in several ways, including:

• Exaggeration of damage: For example, after a burglary, a person may list more items as stolen than are actually the case.
• False information: Providing false information when taking out an insurance policy in order to obtain a lower premium or better coverage.
• Self-inflicted injuries: Deliberately causing an injury in order to obtain compensation.
• Exaggeration of personal injury: Claiming greater physical limitations than actually exist after an accident.

According to Section 279 of the Criminal Code, insurance fraud is considered fraud, which can result in fines or imprisonment up to one and a half years. A conviction for fraud will also appear on the criminal record for up to five years.

How do insurance companies deal with suspected fraud?

When an insurance company suspects fraud, a thorough investigation is launched to confirm or confirm the suspicion. This typically involves:

• Documentation review: Analysis of injury reports, police reports, medical certificates and other relevant documents.
• Obtaining additional information: Contact witnesses or other persons with knowledge of the case.
• Observation: In rare cases, personal observation may be necessary, especially in personal injury cases where there is a well-founded suspicion of fraud. This method is used only as a last resort and requires approval from the company's management.

Insurance companies follow ethical guidelines and applicable law in their investigations. They ensure that their methods are proportionate and respectful of the rights of customers.

Consequences of insurance fraud

In addition to the legal penalties, insurance fraud can have several negative consequences:

• Financial payback: Any unjustified withdrawals must be reimbursed to the insurance company.
• Termination of insurance contracts: The company may choose to terminate the cooperation with the customer.
• Difficulty in taking out new insurance: A registration for fraud can make it difficult to take out insurance with other companies.

Insurance fraud is not only illegal, but also unscrupulous, as it goes beyond the vast majority of honest customers. Therefore, insurance companies work purposefully to prevent and combat fraud in order to ensure fairness and confidence in the insurance system.

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