Claims Victim Attorneys and Insurance Companies Dispute: Disagree on Depth of Insurance Fraud

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| | Updated: 03/15/2021 1:34 AM

Fraud in the insurance sector does not bring agreement between the insurance companies themselves and the lawyers of claims victims.

A company like AXA insists that the insurance fraud rate detected in Spain grew in 2020 to 2.2%, compared to 1.9% in 2019, according to the conclusions of the VIII AXA Insurance Fraud Map .

This rebound has taken place in one of the most complex social and economic contexts in the recent history of the country, a consequence of the Covid19 pandemic.

In fact, the report adds, the economic crisis will create conditions that could lead to an increase in insurance fraud cases. In the years after the last economic crisis, insurance fraud attempts, especially occasional ones, doubled.

Arturo López-Linares, Claims director of AXA Spain, considers that “although the vast majority of clients are honest, we know that some people who are experiencing financial difficulties may be tempted to commit insurance fraud, something that, due to expert techniques, is today more difficult never”.

And he warns that “In 2008 we saw how insurance fraud detection rates doubled, something that could be tried again in the coming months.”

Arturo López-Linares, Claims Director at AXA Spain, affirms that the insurance fraud rate detected in Spain grew in 2020 to 2.2%, compared to 1.9% in 2019.

FRAUD RATE IN SPAIN (FRAUD CASES / TOTAL CASES)

* In order to be able to infer and talk about the fraud rate in Spain, AXA has weighted the fraudulent cases and the accident rate by its market share in each province.

On the other hand, the fraudulent compensation payments avoided in all branches – Life and Non-Life, Individuals and Companies – have remained stable. In 2020 this amount was 67 million euros, which represents an increase of 2% compared to the previous year.

Regarding the business area, the AXA study concludes that auto insurance, mobility, continues to concentrate the highest percentage of fraud, with more than half of the cases.

In 2012, seven out of 10 fraudulent claims occurred in this line of business, but the percentage has been gradually decreasing, and very significantly in recent years as a result of the reform of the Injury Scale that took place a few years ago, which did less attractive the alibi of the car to defraud the insurance; and new detection techniques.

On the other hand, it is worth noting a strong growth in fraud attempts at Home, which in 2020 increased by 18%.

It is possible that the confinement to which the Spanish population has been subjected since the beginning of the pandemic has influenced this fact.

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Among the most common practices are the presentation of false invoices when compensating a claim, the lack of maintenance of household goods or the use of real weather events to generate false claims.

FRAUD IS NOT THAT HIGH

However, the opinion of lawyers like Manuel Temboury President of the Victims’ Lawyers Association (ADEVI), recalls that “fraud is a crime and as such, it must be prosecuted by the criminal justice system, which implies that only those cases in which there has been a conviction are fraud. Therefore, the data provided is not real ”.

“On the other hand, insurers always consider that there is fraud and, therefore, they refuse to pay, when those involved in a claim are friends or relatives of each other,” he says.

And remember that “I have a multitude of accidents (especially in small towns) where those involved are related to each other. And these situations occur frequently, but not for that reason they are fraud ”.

Temboury points out that there are detective cabinets that are awarded by insurers when they understand that there is fraud in a claim. In the same way, insurers award prizes to those processed who detect fraud.

Manuel Temboury Moreno, president of the Association of Lawyers for Victims of Civil Liability (ADEVI), assures that insurers always consider that there is fraud and, therefore, they refuse to pay.

As well points out that “I understand that this fraud data is also based on those sentences where the injured party obtains less compensation than he is requesting. That is unreal ”.

“As a general rule, the Judges grant compensation in half between what the parties request. In the same way, wouldn’t those sentences where the judge considers that the compensation is greater than that offered by the insurer would also be fraud? I say this because 99 percent of the sentences are partial estimates ”.

Finally, this lawyer believes that the fraud that insurers commit with the injured is never discussed. And it warns of some bad practices such as that the “company itself, which has to defend the insured, forces him to fix his vehicle in arranged workshops where they are repaired with second-hand materials.

In rear blows where the bumper is made of elastic plastic, they fix everything that is seen, leaving unrepaired those interior elements that are not visible (crossbar, skirt …) and that are damaged by the impact.

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Then, when the injured party (for example, cervical spine) claims the injury from the other insurer and the latter presents in court the expert opinion of the own insurer where there is a very small repair value.

With this technique and in line with the alleged fraud they sell very well to the judges that with no material damage it is impossible to generate injuries.

He also denounces that the insurers send you to their own clinics where they are commissioned to do rehabilitation very quickly and discharge without sequelae, even if the patient is still ill.

With this they save the payment of days and consequences, which is what is paid as compensation in traffic accidents ”.

In the end, this expert believes that these types of studies are carried out by insurers to sell before public opinion the existence of a fraud that is not so much. This saves a lot of money. Temboury also points out that thanks to Covid, insurers have saved many millions due to the absence of claims.

FRAUD LINKED TO THE ECONOMIC CRISIS

For its part, Fernando Fanego lawyer, member of the Advisory Council of the Civil Liability and Insurance section of ICAM, points out that “historically the rate of insurance fraud has always been the Achilles heel for the spectrum of the insurer in Spain.”

In his opinion, this type of fraud is linked to economic crises and lack of resources.

«The mischief and ingenuity of those who plot to favor themselves have always made a dent in that part of the population that continually seeks deception. But if we had this very well learned about something, it is derived from the years after the last mega economic crisis in which insurance fraud multiplied exponentially, “he says.

As we know, thanks, among others, to the study of the Fraud map prepared by AXA, in Spain it grew up to 2.2% compared to previous years with less pronounced indices.

The reasons and consequences of said increase are housed in the casuistry and in the deepest and darkest part of the idiosyncrasy of our population. Starting from the base of the everlasting existence of fraud, we must turn to the socio-economic and natural facts that, during the past year, have plagued our country.

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For Fanego “the existence of a phenomenon, which, if you will allow me, is still paranormal for us, COVID-19, has made a dent in the thinking of those who have seen their ability to generate and create wealth diminish. In short, to be able to make it to the end of the month ».

Fernando Fanego Castillo, a lawyer specialized in Civil Liability and Insurance at Nexum Legal and a member of the ICAM Advisory Council in this field, believes that fraud is linked to economic crises.

In the same way, “it intercepted the necritical path of fraud, the approval of a new Scale that has considerably diminished the one that has regard to the deceit of its insurance company, and, above all, the increase in the techniques that they have today to avoid it.

In his opinion, lastly, the natural disasters that hit our territory have been the spur and breeding ground for the insurer’s deception. This type of phenomena of nature enlivens the psyche of many to see it as an option in the creation of a semi-real damage that aims to deceive the insurance company.

That is to say, it gives the feeling that every time a social or natural element breaks out that leads to the misery of the population, the insured’s ability to seek a way out through deception increases, which in the end tends to be very expensive.

Bushel stresses that “in view of this situation, and to the contrary, it must be pointed out that the compensation amounts of a fraudulent nature have been maintained with a certain stability in our insurer map”.

The interception of this type of conduct is conditioned by the premium paid by the policyholders. This reality has meant that the undue payment could be avoided, causing significant savings in the Civil Liability Insurance.

The object of this study, it is concluded that the insurance of our fleet continues to concentrate the highest percentage of fraud, with more than half of the cases, without forgetting the huge increase in home insurance in recent years.

For this jurist, “the ingenuity of the policyholder who looks for any nook and cranny derived from a natural and unpredictable event has been discovered in a relevant way, in order to create a new prototype of deception to his home insurer”.

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