Car insurance fraud: how can you combat it?

Car insurance fraud is a constantly growing phenomenon, representing a major challenge for insurers. Whether through misleading declarations, fictitious claims or falsified documents, the methods used to deceive insurance companies are varied and sophisticated. What are the different types of car insurance fraud? What are the risks and penalties involved? And how can you protect yourself? We take a closer look in this article. 

Car insurance fraud: what is car insurance?

Car insurance is a essential financial protection for vehicle owners. It is designed to protect both the driver and third parties in the event of accidents, property damage or personal injury. 

By taking out car insurance, the driver can be compensated for damage to their own vehicleThis is the case whether as a result of an accident, vandalism, theft or natural disaster. 

What's more, car insurance generally includes a civil liabilitywhich covers damage caused to third parties, including bodily injury and damage to property. This cover is often mandatory in many countries, including France. It is a legal prerequisite for use on public roads. 

To prevent the proliferation of false declarations, the law requires all policyholders to provide their insurers with accurate information. We'll explain. 

Car insurance: what are the legal requirements? 

According to'Article L.113-2 of the Insurance CodeWhen you take out a car insurance policy, you must comply with a number of legal obligations. 

• Paying the premium The policyholder must pay the insurance premium on time.
• Answering the insurer's questions When the policy is taken out, the insured must answer the insurer's questions honestly about the risks insured.
• Inform about potential changes Changes to the policy: during the term of the policy, the insured must inform the insurer of any changes that could increase or create new risks.
• Declaring claims The policyholder must inform the insurer promptly in the event of a claim, i.e. within the time limits stipulated in the contract.

Making a false declaration is risky. What are the most common types of fraud? What are the consequences? We take a look. 

What are the different types of car insurance fraud?

In 2022, according to a study carried out by YouGov, 22 % of policyholders said they had already committed insurance fraud. What are the different types of car insurance fraud? 

Declaring false claims 

Fictitious claims are a common form of fraud.

The practice is quite simple: ill-intentioned policyholders invent incidents or exaggerate damage to obtain a unjustified compensation. To make things a little clearer, here are a few examples: 

• A policyholder makes a false declaration of a break-in to justify a broken window  
• A subscriber exaggerates damage to maximise your compensation 
• An insured provides a Inflated repair bill in order to obtain a higher refund than he should receive 
• A subscriber intentionally causes an accident to obtain compensation. 

Subscription with incomplete information 

To save money, some policyholders deliberately fail to provide full information to their insurer when they take out the policy. How do they go about it? 

For example, they do not mention the existence of another driver. It's a finely honed technique: by not mentioning a driver, they hope to pay less when they take out the policy. 

Need more information? Read our article Insurance fraud and money laundering 

Falsifying the information statement 

The information statement is an official document detailing a policyholder's car insurance history. There are several advantages to this 

• There reduced insurance premiums Having a favourable statement of information can enable a policyholder to benefit from lower insurance premiums. By falsifying this document to conceal past incidents, the policyholder can obtain a more advantageous rate than that to which he or she would originally have been entitled.
• L'better cover Hiding a problematic driving history can enable an insured to obtain better cover. 

Failure to report an accident 

As stated in the Insurance Code, policyholders must report all claims to their insurance company. Failure to report an accident is a common fraud, and one that is often used, to avoid an increase in premiums.

Altering the details on the joint report 

After an accident, it may be tempting to change the information on the joint accident report. But why? Reducing liability or obtain higher compensation.

To find out more about property insurance fraud, click here: property insurance, compensation fraud 

What are the risks and penalties for car insurance fraud?

Falsifying claims declarations has become a common practice, often used to obtain compensation fraudulently. The aim is to receive money or cover damage that the insurer would not have paid if the real situation had been known.

In France, this type of fraud is considered a criminal offence. criminal offense and is severely punished by law. 

In accordance witharticle 313-1 of the Criminal Code, penalties can include a fine of up to 375,000 and a prison sentence of up to 5 years. There are also additional penalties for aggravating circumstances, such as participation in an organised gang.

In addition, penalties for falsifying documents can include a fine of up to 45,000 and up to 3 years' imprisonmentin accordance witharticle 441-1 of the Criminal Code.

To find out more about the risks and penalties involved, we interviewed Emeric Desnoix, lawyer and anti-fraud consultant. You can read his interview in our article : What are the risks and consequences of insurance fraud? 

How can we combat car insurance fraud? 

Establishing regulatory and legislative initiatives

Regulatory initiatives, such as the Insured Vehicle File (FAV)play a crucial role in the fight against fraud. 
This file allows you to quickly check whether a vehicle is properly insuredThis reduces the possibility of false declarations. Regularly funded by insurance companies when a motorist takes out a contract, ARGOS uses it to detect and prevent fraud. 

Setting up specialist investigation teams

Setting up specialist teams is a good way of combating car insurance fraud. 
These teams can work working closely with the police and collaborate with other insurance companies to share information on known fraudsters. Together, they are improving the effectiveness of the fight against fraud! 

The use of advanced technologies

It is recommended that insurance companies use advanced technologiesas artificial intelligence and the machine learningto detect and prevent fraud.
These tools enable you toanalyse claims data to identify suspicious behaviour or unusual patterns, such as inconsistent declarations or recurring claims.

At Finovox, we have developed a innovative solutionspecially designed to help companies detect, identify, And explain any form of document fraud. Our technology is based on a proprietary artificial intelligence which analyses the data structure, THE metadataand the consistency of information in the documents.

In addition to this in-depth analysis, Finovox gives you the opportunity to understand and of share alterations detected in your documents. How does it work? You can conduct your survey directly on our platform and obtain a detailed summary sheet in PDF format.

Interested in our solution? Contact our experts to find out more and discover how it can benefit your business!