Most people who do not report insurance fraud stay quiet because they think this is a victimless crime and they would rather not get involved in the affairs of others.
Commercial and private clients commit insurance fraud for different reasons. Businesses tend to commit fraud to improve a stultified cash flow or to make improvements to an asset. Private consumers, on the other hand, commit fraud out of greed and because they want to get back as much as they can from the premiums they have paid the insurer.
'But doesn't everyone do it?'
More worryingly, however, the survey found that people imagined ‘everyone’ defrauded their insurance company at one or other time and that people tend to commit fraud to ‘get back’ at insurance companies that they imagine do not treat them with respect.
Insurance fraud has severe consequences... and not only for the people who are caught trying to defraud their insurers.
The more fraud occurs, the higher premiums become for everyone in the insurance pool. It’s difficult to give an accurate figure, but without insurance fraud, premiums would be in the region of 15-20 percent lower across the board.
Between R2 and R4 billion is lost to fraud by the larger industry each year. There is a direct link between the cost of insurance premiums, and the number of people who get away with fraudulent or inflated claims.
Want to help stop fraud?
If you think a person or company is trying to scam their insurer, just tip off your insurance company and they will let the SAPS know. After a thorough investigation, the perpetrators could face criminal charges.
Would you ever consider committing insurance fraud? Do you look at it as a crime? Or do you think you could get away with it?