VFM Analysis Highlights Home Insurance Fraud Statistics

VFM Services Ltd, the latest entrant to the Canadian insurance market following the launch of its counter fraud training and conversation management initiatives in January, released the results of its Q4 2013 counter fraud index. These latest figures highlight that the value of the average fraudulent household content claim stands at $2,255.64, its highest level since records began in 2004.

Sally Griffiths, director at VFM Services, says this suggests people are becoming more sophisticated in their approach to fraudulent claims.

“The data from our quarterly index clearly shows a peak in the value that the average fraudster is claiming for on their household insurance. This is largely because claims values for opportunistic fraud are historically quite low and people are realizing that any gain to be made by getting away with a fraudulent claim on their household policy is being negated by the cost of the excess on their policy. This means we are now seeing a clear trend for fraudsters to submit slightly higher value claims on their household policies in order to make the fraud ‘more worthwhile’ in their eyes,” said Griffiths.

The VFM director noted an increase in claims for more financially lucrative items, such as jewelry and watches, which are typically valued higher than iPhones and laptops.”

VFM Services analyzed over 250,000 claims from its desktop counter fraud solution since 2004 to track the most fraudulently claimed for items and values, and has also tracked claims trends in depth over the past four years. All claims relate to home insurance, valued at under $18,500.

VFM is keen to warn insurers that despite this trend, TVs and mobile phones are still a high risk commodity, particularly during high risk periods, for example during the 2014 Olympic and Paralympic Games and Canada Games in 2015. VFM handled 1477 suspected fraudulent iPhone claims in the UK alone in 2013 and 2294 suspected fraudulent claims for TVs with a nil settlement rate of 42 percentage, a pattern which is likely to be replicated in Canada.

“We expect to see fraudulent claims peak over these high risk periods as people want to get their hands on the latest models in order to keep track of their favourite sporting events,” Griffiths saids

Source: VFM Services Ltd