5 signs you've committed insurance fraud

From a small child allegedly driving a car to fake photo evidence of theft, Aviva has revealed some of the most unusual fraud insurance cases received in 2022. But it doesn't take a criminal mastermind to commit fraud - some people may be doing it without even knowing.

Aviva's own claims data showed more than 9,250 instances of fraud in 2022. Some of the shady claims the insurer uncovered were clear attempts to deceive, but not everyone who commits fraud does so intentionally. In some cases, it can be as simple as making an error on a report.

Which? takes a look at some of the more common ways customers can unwittingly commit fraud and how to unpick the damage if you realise you've made a mistake.

What were most fraudulent claims about?

Last year, Aviva identified nearly 10,000 cases of insurance fraud, worth £120m in payouts.

Motor bodily injury accounted for almost half of all cases of insurance fraud. The provider also found a rise in repair and replacement fraud, detecting 22% more fraud on claims for damaged vehicles last year. Aviva found nearly two-thirds was organised fraud committed by third parties. There was also an increase in motor collision fraud in the last three months of 2022.

Fraudulent home insurance also jumped 18% last year, while Aviva saw more bogus claims for accidental damage, accidental loss and theft. The top five items declined for home insurance fraud were mobile phones, televisions, jewellery, laptops or tablets, and watches.

Some of the more ridiculous cases included a claim for motor bodily injury where a medical report stated that the driver of the car was a six-year-old child. 

Suspicions were also aroused when a holidaymaker reported losing both their newly insured wedding and engagement rings in the sea in Greece. After realising they'd been rumbled, the claim was withdrawn and the rings were miraculously ‘found’ by a stranger. 

Another case of fraud was foiled when the insurer spotted that the image used to claim for the theft of a man's watch worth over £20,000 was lifted from the internet.

• Find out more: best and worst car insurance companies

Are you committing fraud without knowing it?

Not all cases of fraud are planned or intentional. New research by fraud prevention service Cifas shows that one in eight adults has committed – sometimes unintentionally – one or more frauds in the past 12 months. That's an increase from 10% in 2022 and 8% the year before. 

The survey of 2,000 adults in the UK revealed respondents saw certain kinds of consumer fraud as 'reasonable', with 20% believing mobile phone fraud was the least likely to be illegal. Here are some common ways customers could find themselves in hot water over insurance claims:

1. Withholding information

Honesty is always the best policy. When you buy insurance, answer all questions as truthfully and accurately as you can. If in doubt, make a note to check and call your insurer back to clarify any details. 

Classic examples of this type of fraud include omitting pre-existing conditions when applying for travel insurance, failing to inform your insurer of any upgrades to your home, or simply forgetting to tell your provider of a change of address or occupation.

2. Lying on an application

Intentionally lying on an application also counts as fraud. Sadly, with premiums currently at a record high for many types of insurance, more and more customers may be tempted to tell a fib or two to cut costs.

According to Insurance Fraud Bureau (IFB) research, application fraud is on the rise among younger drivers - with 27% of 18-24 year-olds surveyed admitting they'd consider lying on an insurance application to save money - up from 21% last year. 

3. Exaggerating

With premiums skyrocketing and cost of living pressures still squeezing many households, it could be tempting to exaggerate in a claim the extent of damage caused or the amount of financial loss. It may seem like a white lie but embellishing a claim for financial gain, or providing false information when applying for insurance is classed as 'opportunistic' fraud.

According to the City of London Police’s Insurance Fraud Enforcement Department (IFED), 'opportunistic' insurance fraud cases rose by 61% between March 2022 and April 2023, with motor insurance accounting for 51% of cases the unit received and property insurance fraud the second highest at 29%. 

A survey carried out in June by the IFB also found one in 10 people said they would consider making a fraudulent insurance application or claim if they were struggling financially.

4. Fronting

You can, legally, reduce your premium by adding an older, more experienced driver to your policy. But if they are named as the main driver, when they're not that's called 'fronting'. 

It's another practice that may appear victimless but could see you caught out by an insurer's fraud investigators.

Young drivers who would normally pay a much higher premium are most likely to do this, especially considering the huge hikes in premiums recently. The average cost of car insurance for young drivers has gone up by 50% in phe last year, according to new research by Compare the Market.

Usually, the cost of getting added to your parents' insurance should be cheaper than taking out a separate policy for yourself. But Which? found it doesn't always work out to be any more affordable. 

5. Modifications

Improving the look of your vehicle or investing in extra security features that add value to your car or boost its performance could increase the cost of your motor insurance premium. 

You should therefore always let your insurer know if you’re making any modifications to your vehicle, or if you buy a car that you know has been modified. Failing to do so could be considered fraud by your insurer.

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• Find out more: the most common types of insurance fraud

Fraud can have serious consequences

If you are found to have committed fraud, not only might your insurance policy be invalidated, but you could also potentially have your name added to the Insurance Fraud Register.

This is an industry-wide database of known fraudsters, used by insurers when making underwriting decisions and assessing claims. If you end up on the list, you could struggle with any future insurance applications, credit rating and mortgage applications.

You could also face fines or in the worst cases, prosecution and a criminal record.

What if the insurer is wrong?

If you believe you've been wrongly accused of fraud by your insurer, there are a few things you can do. 

Collect as much evidence as you can to prove you are not to blame or that you are indeed telling the truth. If there is a witness or - even more powerful - photographic or video evidence, that can also help you fight your corner. If it relates to car insurance, dashcam footage can also be used to confirm details of the event.

Finally, if you think your claim has been mishandled, make a complaint and, if needed, raise it further with the Financial Ombudsman Service. These steps aren't guaranteed to get you the outcome you want, but they are at least a way of having your claim re-evaluated. 

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