Specialist insurance risk and commercial law firm BLM has launched a new fraud tool to help insurers and claims managers identify spurious property fire damage claims.
Whilst the majority of claims are genuine, property fraud is a significant and growing problem for insurers. ABI research shows that dishonest property insurance claims detected in 2019 rose 30% from the previous year, increasing to £124 million, with fire claims incurring some of the highest values amongst these claims.
The ‘Key Fraud Indicator for Fire’ tool highlights the most common indicators of fire fraud based upon BLM’s claims experience, for both when a claim is submitted and during any subsequent investigation. These include; the insured refusing an inspection, remedial work already being completed, or if cover has recently been incepted or increased. And from an investigation point of view, are there multiple seats of fire, has relevant evidence or documentation in support of the claim been destroyed by the fire, or have security systems or devices been tampered with?
John O’Shea, Partner and Head of Property Damage & Recovery at BLM, explained: “Whether fires have been started deliberately or losses have been exaggerated, there are many potential fraud indicators insurers and claims managers need to watch out for. This new tool brings all of the tell-tale signs together to help insurers identify where insurance fraud might be present.
“If two or more of the indicators apply to a claim we recommend fully profiling and assessing that risk through a rigorous due diligence process. This will help ensure that honest policyholders are paid quickly, whilst bespoke investigations are carried out where cases warrant further validation.
“The number and cost of claims are rising, and are extremely expensive for insurers. We need to work together to tackle fraudulent claims and prevent the rising levels of falsified and exaggerated fire claims.”