Legitimate insurance claims investigated for fraud

It is a sad fact that during times of economic hardship the number of potentially fraudulent insurance claims increases. Naturally Insurance companies will investigate suspect cases in order to avoid those cases which are fraudulent. Worryingly, there appears to have been a disproportionate increase in the number of cases that Insurers are investigating, seemingly without any provocation.

Don’t mention the F-word!

Many insurers appear to be adopting a tactic where they will ask many questions which have little or no relevance to the claim at hand. The correspondence raising the questions is often written in such a format that it is clear that the insurers believe that fraud is being committed, but do their utmost to avoid the f-word. These insurers will often refuse to be drawn on whether they intend to allege fraud or not, and what has prompted such an investigation if anything.

Unnecessary questions can increase costs

Unfortunately a number of insurers appear to have forgotten that they are bound as much by the meaning and spirit of the Civil Procedure Rules, as law firms are. They believe that it is reasonable to ask a series of often irrelevant questions and refuse to deal with claims, but will not themselves confirm their allegations or provide evidence in support. Their efforts to avoid fraudulent claims and the cost incurred therefore has the opposite effect. By refusing to deal with a case and co-operate, the only course available to the client is to issue proceedings, which in turn increases the costs that will inevitably be incurred by one party or the other.

Who benefits?

It is as much in the interests of a law firm as an insurer to identify a fraudulent claim at an early stage. Law firms do not benefit by having fraudulent claims in their case load; time money and effort will be expended fruitlessly and ultimately the firm’s reputation will suffer. Far better then for insurers to remember their obligations, to co-operate and share evidence in the same way that the law firm is obliged to do so.

Insurers also need to carry out better selection criteria for what appears to be a fraudulent claim. In our experience they are investigating such a wide selection of cases most of which have no indications of being fraud. It is rather sad that in our experience there are particularly sections of the population who appear to be targeted by insurers. We can say that there has not been a single claim dealt with by Ascot Lawyers, where fraud has been alleged, that has been proved to be fraud before the courts.

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