Insurance Fraud Increases As The Recession Hits Hard

Insurance Fraud Increases As The Recession Hits Hard

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The recession has hit people hard and forced them to re-adjust how we live our lives. Our changing lives mean that for many they have to drop their standard of living. People are certainly finding it hard to come around to this new mindset. This is giving rise to a wave of insurance fraud cases. They wish to keep their standard of living by defrauding insurance companies and driving up the price of your policy. These people look at the bankers getting away with daylight robbery and they want their own slice of the pie.

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Most people think that it is only the poorer people in society that get up in insurance fraud. While this is often true there are large numbers of well off families embroiled in these illegal activities too. They wish to maintain a standard of living that they can no longer afford and in order not to ‘lose face’ with the neighbours they turn to insurance fraud to sort out their finance problems.

The Irish Insurance Federation (IIF), the representative body for insurance companies in Ireland, is continuing its effort against insurance fraud. Michael Horan, Non-Life Manager in the IIF believes “there is definitely an increase in claims in the recession”. The number of calls to Insurance Confidential, a hotline run by the IIF where people can anonymously report suspected cases of insurance fraud, had more than doubled in 2009. There were almost 700 new cases of suspected insurance fraud reported to the Insurance Confidential hotline in 2009 – up from approximately 300 in 2008. And as the recession continues, the risk of fraud will increase.

The insurance industry really began to focus on fraud prevention and detection about ten years ago. One of the main ways insurers work together in this respect is through Insurance Link, a database used to identify repeat claimants. Nick Starling of the ABI says ‘Whether claiming against a third party for bogus personal injury or on their own insurance, fraudsters are more likely than ever to get caught, leading to more expensive and harder-to-obtain insurance and credit and the possibility of a criminal record’.

Over the last year we have seen the introduction of savage cuts in the budget. This is highly likely to cause monetary problems for many families. Insurance fraud will be seen as one way out of a debt spiral. With the new insurance fraud detection measures that are in place it has hoped that this will deter these fraudsters in the future.

AXA focuses strongly on detecting insurance fraud. This helps us to bring you competitive car insurance quotes and commercial van insurance quotes.

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