Our fourth blog in the Insurance Act 2015 series looks at the the impact of fraudulent claims. For an overview of the new Act, coming into effect on 12th August 2015, click here.


The problem with the current legislation is that there are some harsh rules in insurance law that are sometimes used when an insurer suspects, but cannot prove, fraud. This results in wrongful accusations of fraud, and policies being avoided (cancelled) after years of paying premiums.


The new Act provides a solution in the form of a set of responses to fraudulent claims that are meant to be both proportionate and appropriate in deterring fraudulent behaviour, while minimising the risk of undue punishment.


If the insurer finds that a claim is fraudulent (eg claiming for more than the actual loss), the 2015 Act confirms that the insurer can reject the claim (ie not pay our anything), and keep any premiums which have already been paid.


Another change is that insurers would not be able to withhold paying a genuine claim, even if a subsequent fraudulent claim was made. For example, if a robbery occurred in January and then a fraudulent claim as made in February, the January claim would still have to be paid. However, if another genuine claim was made in March, it would not have to be honoured, as cover would cease from the moment of the fraudulent act.


In summary, there are a number of protections written into insurance contracts for the benefit of insurers. These protections are now written into the law so there is less ambiguity for policyholders. Disputes around policy coverage in light of fraud should now be seen less often.


There’s a lot to take in, and a lot of significant changes, so do keep checking back for the other blogs in the series.



Give us a call or drop us an email at any stage with any questions about the Insurance Act 2015 and how it will impact your organisation. We’ll be happy to answer any questions and ensure that you are confident about the insurance you have in place.