As a tradie, you're probably happy taking out your insurance policy and paying your premiums without it even entering into your head to do something fraudulent. Unfortunately, insurance fraud can be all too common and not only is it dishonest but it can also impact on your premiums. It’s important to understand what insurance fraud is and how it can end up affecting you financially.
What is Insurance Fraud?
Insurance fraud is an act committed in order to get a fraudulent outcome from an insurance process. Insurance fraud is a criminal offence and can lead to serious consequences. Types of insurance fraud can include:
- Opportunistic fraud - When someone may have a legitimate claim but exaggerates how much an item was worth or adds additional items onto a claim. An example of this kind of fraud may be losing some work equipment and overstating how much it’s really worth.
- Premeditated fraud – A more extreme example of fraud and involves the fabrication of a claim through staged incidents. It can include falsifying acts such as arson, theft or injury. This type of insurance fraud is generally highly organised and could involve groups of people.
- Fraudulent non-disclosure fraud – Involves giving false information to an insurance company. This could include failing to disclose a criminal record and prior claims or providing false information for a claim.
How Does it Impact on Me?
People who commit insurance fraud often think that their actions affect only the insurance company, who can easily absorb this cost. Unfortunately, this is not the case. The costs impact everyone who pays their insurance premiums as the price of insurance increases following false claims. The Insurance Fraud Bureau of Australia has indicated that insurance fraud costs Australia $2 billion annually and honest policy holders pay the price through increased premiums to cover this cost.
Although it’s unlikely that most people would be involved in highly organised criminal activity to commit insurance fraud, it can be very tempting to overstate how much something is worth or to leave out important information when it comes to claim time. However, remember that this behaviour affects everyone and leads to increases in insurance premiums. Honestly is the best policy when it comes to making your insurance claims.
Insurance fraud isn't the only thing that can affect your premiums and it’s important to know you’re getting the best insurance deal for your needs. At All Trades Cover, we offer insurance specially tailored to suit the needs of tradies and we make sure you get the best deal at the best price. We offer friendly and professional service to make the whole process as easy as possible.
To discuss your insurance options or for any other questions, contact All Trades Cover on 1300 826 850 today and we would be more than happy to help. You can also fill in our easy online form for a quote.