Property insurance: compensation fraud

Dommage Aux Biens (DAB) insurance has been created to cover the material damage that occurs in the day-to-day life of every individual. It covers movable and immovable property, as well as personal liability. However, as an insurer, you need to be vigilant, because fraud in this sector is spreading like wildfire. Let's take a look at this type of insurance, legal obligations and the development of compensation fraud. 

What is property insurance?

The name says it all: property insurance allows individuals toinsuring tangible and intangible assets against damage occurring in everyday life. The damage can be varied: accident, theft or fire. 

Property insurance is grouped under the same heading as liability insurance, i.e. within non-life insurance.

Which insurance contracts include property insurance? 

Today, there are two main contracts for property insurance: 

• L'comprehensive home insurance that protects your home 
• L'car insurance that guarantees your motorised vehicle 
  

To find out more about the insurance industry, we have a dedicated article : A closer look at the different insurance sectors

What does this type of insurance cover? 

Each insurance cover is very specific and depends on the contract you take out and options you choose. It is therefore important to find out all you can about the exclusions and the guarantee ceilings. 

In general, the claims covered are : 

• Natural disasters 
• Storms, snow and hail 
• Fires 
• Burglary 
• Everyday accidents such as water damage 
• Broken glass 
• Technological disasters 

Is it compulsory to insure your property? 

According to thearticle 1240 of the Civil Code, "Any act whatsoever by man which causes damage to another person obliges the person through whose fault it occurred to make reparation for it." 

For this reason, French legislation requires third-party liability insurance for tenants and owners of motorised vehicles. 

The expansion of property insurance fraud  

Property insurance fraud is a major problem affecting all insurance companies, without exception. 

It occurs when individuals provide intentionally falsified information with the aim ofobtain insurance benefits or to claim imaginary damage. 

This is an easy way for fraudsters to make money. By declaring false claims or exaggerating losses, they hope to obtain compensation payments from their insurance company.

To make property insurance fraud clearer in your mind, we'll give you an example. Let's imagine that someone tells their insurer that jewellery has been stolen from their home. However, after investigation, it turns out that the jewellery never existed or that it had been hidden in anticipation of the theft report. In this case, the insured is trying to obtain reimbursement for goods that he or she never possessed or that he or she concealed in order to receive compensation.

To find out more about the risks of insurance fraud : What are the risks and consequences of insurance fraud? 

Protecting yourself against property insurance fraud

Insurance companies can use a number of methods to combat the scourge of property insurance fraud. 

Assessing the risks presented by a policyholder 

To protect themselves against property insurance fraud, insurance companies and policyholders can take several steps preventive measures. 

As a first step, insurance companies must, assess the risks before taking out an insurance policy. 

They can, for example, background checks on applicants, inspect insured property and assess the probability of a claim.

Check the claims of each policyholder 

Insurance companies can carefully check all their policyholders' claims to ensure that they are legitimate. 

For example, they can collecting evidence, work with claims adjusters or monitor suspicious behaviour and abnormal. 

Relying on advanced technologies 

Insurance companies can take advantage of advanced technologies such as artificial intelligence, automatic learning and data analysis to detect and prevent property insurance fraud more effectively. 

These tools can identify fraud patterns, improve the accuracy of risk assessments and speed up the claims process.

At Finovox, we have developed a solution available in SaaS or API format. It enables companies to detect, identify and explain any type of document fraud. The solution has been developed using proprietary artificial intelligence that analyses the data structure, THE metadata and the consistency of information in the documents. 

In addition to this initial analysis, Finovox enables you to understand and share the alteration of your documents. How do you do it? You investigate on the platform and retrieve the analysis via a summary sheet available in PDF format.  

Interested in this solution? Contact our experts to find out more!