Source: Insurance Business
Move over, holiday sickness claims. Now there’s another type of claim showing a sharp increase in number, no thanks to claims management companies (CMCs) filing fraudulent or inflated claims.
A report by the BBC cited research from insurance company Direct Line, which showed that 54% of more than 2,000 drainage claims made in 2016 were inflated or invalid. In addition, the number of claims for blocked drains is estimated to have risen by 22% in the first quarter of 2017 compared to last year.
The insurer attributed the surge to CMCs looking to profit from householders’ misfortune. Direct Line stressed that policyholders should contact their providers directly instead of accepting offers of assistance from CMCs, who are paid a significant amount.
According to the report, in some cases drainage firms allegedly sell customer details to CMCs, who then reach out to residents in hopes of getting a portion of the payout. Direct Line also cited confusion among customers, who might mistake CMCs for drain repair firms.
“Fraudulent and inflated claims drive up the cost of policies for all consumers,” Katie Lomas, director of Direct Line home insurance was quoted as saying.