Preventative Measures of Insurers Against Insurance Fraud With Particular Regard to Motor Insurance

Abstract

Insurance fraud is prevalent in all spheres of the insurance industry; however, motor vehicle insurance sees a major increase in fraudulent insurance claims. It is for this reason that insurers need mechanisms in place to protect themselves from fraudulent claims by an insured. One of the more common preventative measures that insurers are using to protect themselves is by inserting forfeiture clauses in the insurance contract itself. These clauses aim to protect the insurer against any type of fraudulent claim by the insured. These clauses do, however, also bring a host of issues to the fore; including the fairness of these clauses as against the insured. These clauses do tend to be one-sided and therefore, a proper evaluation of these clauses is necessary to understand the application and effect these clauses can have on both the parties to an insurance contract.

The Perception of Insurance Crime Held by Students

“…Therefore, it should be in the interest of all policyholders that insurance companies have funds to counteract and combat the phenomenon of insurance crime (Huneberg, 2017). On the other hand, the increase in the effectiveness of combating crime may, paradoxically, lead to an increase in crime statistics due to the disclosure of the dark figure of crimes.…”