Stricter penalties for insurance fraud

4 in 10 people could be tempted to inflate home insurance claims for more compo

3 in 4 respondents call for stricter penalties for insurance fraud

Survey reveals women and older people are most honest when it comes to home insurance claims

Monday 1 July 2024, Dublin: Almost four in ten (37%) people “might” or “would” be tempted to inflate a home insurance claim in order to receive some extra compensation. And almost one in five people (17%) know someone who has done this.  This is according to the findings of a new survey from Aviva Insurance Ireland DAC¹ (Aviva), which polled 1,000 people nationwide on their thoughts around, and experience of home insurance fraud which found that three in four (75%) of those surveyed would like to see stricter penalties for insurance fraud, with harsher financial penalties being the most sought-after punishment.

Headline findings from the Aviva survey reveal that:

•  Almost half of people (47%) believe there should be tougher financial penalties for insurance fraudsters
• Almost one in five (18%) would like to see more jail time for such scammers
• More than one in three (35%) believe insurance fraudsters should be named and shamed.

Commenting on the survey findings Brian O’Connor, Aviva said: 

“Our survey shows that 20% of respondents said they are unsure as to whether they would be tempted to exaggerate a home insurance claim in order to get a higher payout – but that it is a possibility. And a further 17% said they would be tempted – by varying degrees. That said, it is encouraging that the vast majority (63%) would not inflate a claim and that almost half (47%) want to see tougher measures taken against insurance fraudsters.

“What the juxtaposition of these findings suggests is that there is a lack of real understanding around how insurance fraud impacts all consumers. It is likely that the 20% of people who said they “might” be tempted to inflate a claim really have not thought this scenario through. They might even think that “minor” fraud such as pushing up the cost of a claim is not really fraud and that it is only claims that are complete fabrications that are. 

“Ultimately however, the survey points to the fact that a significant majority of the public believe that insurance fraud is bad and should be punished. But it’s people’s perception of this type of fraud that I would question. Fraudulent claims push up the cost of insurance premiums for everyone, which means that honest customers end up paying the price. Insurance fraud regardless of amount involved is not a victimless crime, and I think if more people understood this, then we might see people think twice before engaging in any falsification when it comes to claims.”

Honesty

Women emerged as the more honest of the sexes in the Aviva survey. Location and age also appeared to have some bearing with the research finding that:

• Men are slightly more likely than women to be tempted to inflate a claim in a bid to secure a higher payout: 41% of male respondents said they might or would be tempted to do so, compared to 35% of women.
• More men than women are fairly certain they would be tempted to exaggerate a claim (22% versus 13%).
• Men are almost three times as inclined as women to be tempted to inflate a home insurance claim “by a lot” (8% versus 3%).
• Munster people emerged as the most honest with seven in ten (70%) of its residents saying they would “definitely not” be tempted to exaggerate a claim, compared to only 55% of those living in Ulster and Connacht and 57% of Dubliners.
• It appears that the older you get, the more honest you are around claims. Almost half (46%) of those aged between 25 and 34 said they would “definitely not” inflate a home insurance claim, compared to three in four (74%) of those aged 55 plus. Furthermore, while one in ten 25–34-year-olds said they’d exaggerate a claim “by a lot”, only 1% of those aged 55 plus said the same.

Brian O’Connor added: “Our research found that women are certainly the more truthful of the sexes when it comes to home insurance claims. Ironically though, men were more inclined than women to call for more jail time (22% versus 15%) and for naming and shaming of (39% versus 31%) insurance fraudsters.

“Honesty is always the best policy when it comes to insurance claims. Not only do people need to be upfront about their property and contents when getting a home insurance quote but, in the event that they find themselves making a claim, it’s crucial that they are honest. Otherwise, they not only risk having their claim turned down, they also risk jeopardising their chances of getting insurance in the future.”

Additional findings of the Aviva survey include:

• At about one in five, the most likely people to know someone who has inflated a home insurance claim are men, those aged between 18 to 24, and Dubliners.
• The least likely people to know someone who has inflated a claim are women, those aged 35-44, and Munster residents.
• Almost one in five (19%) believe that insurance fraud does not impact them.

“One in five people know someone who has exaggerated a home insurance claim. Unfortunately, fraud offences are on the rise – there were almost 11,300 incidents of fraud and deception offences in Ireland last year – 43% more than the 7,921 incidents recorded in 2019, according to the latest official figures.² More needs to be done to stamp out the harmful effects of insurance fraud and perhaps education and communication with the public and with homeowners should be one of the first steps to achieving this goal,” concluded Brian O’Connor.

1. Carried out by iReach Insights on 1,000 adults nationwide on behalf of Aviva Insurance Ireland DAC (Aviva)
2. See CSO Recorded Crime Q4 2023