A “Toolbox” for Forensic Engineers

Fraudulent
Insurance Claims
349
11
It is possible to insure against almost every kind of loss. The terms of an
insurance policy are, however, carefully worded so as to specify precisely what
risks are covered and the conditions under which liability will be accepted
by the insurer. Where risks are foreseeable the policy clearly sets out the
responsibilities of the insured to prevent such losses. Many people fail to read
the “small print” and assume that their policy will pay out for all kinds of
loss or damage. Only after making a claim do they discover they did not
observe their part of the contract. For example, a homeowner returned to
his house after taking a long winter vacation to find the central heating boiler
had failed and, as a result of a particularly severe frost, several radiators had
split open. In addition, a water supply pipe had burst during the frost and
had flooded the ground floor of his house when the thaw came. Unfortunately,
he found that it was a requirement of his household insurance policy
that he should have had his heating system serviced annually. It transpired
that it had not been serviced or inspected since it was installed more than 6
years before the incident.
People who suffer loss usually assume that it will be covered by insurance,
but when they read the terms of their policy before filling out the claim form
they often find that it is not. Human nature being what it is, a few are
sometimes tempted to deliberately introduce damage or describe circumstances
that simply could not account for the damage or loss described.
Occasionally, claims that are clearly spurious or fraudulent may be submitted
in order to obtain money from an insurance company.
One do-it-yourself homeowner claimed for the cost of redecorating two
rooms in his house, allegedly necessitated by water escaping from an upstairs
radiator on his central heating system. By the time the loss adjuster inspected