It is very important to include all relevant information in relation to an accident when you are lodging your claim for personal injury compensation. Although you should report all of your injuries and symptoms to the insurer, you should be careful not to overstate or grossly exaggerate your injuries and the restrictions they cause you, in order to avoid the legal consequences of fraud.
Lodging a compensation claim that is fraudulent in nature can have very serious consequences, including loss of your claim, repayment of claim costs to the insurer, and possibly criminal charges. Be assured, we are not talking about minor embellishment of your injury symptoms. When we refer to instances of insurance fraud, we are talking about cases of significant exaggeration of injury or restriction, or faking injuries or accidents.
Fraud in personal injury compensation claims
Personal injury insurance fraud is defined as any act performed with the intention to cause an insurance company to compensate you for a non-existent, exaggerated or unrelated injury to the accident covered by your policy.
The most common examples of this are faking or exaggerating your injury, or staging a car theft, collision, or arson.
Take note that you can be guilty of fraudulently claiming personal injury compensation even if you did not lie or make a false representation. You can do this by simply failing to disclose information which you are legally obliged to disclose, or which would be reasonable for you to disclose given the circumstances. A common example of this is failing to disclose a significant pre-existing injury or medical condition.
Types of fraudulent compensation claims
There are two types of fraudulent personal injury claims - soft insurance fraud and hard insurance fraud.
- Soft insurance fraud is also called opportunistic insurance fraud and is the most common type of fraudulent injury compensation claim. This occurs when you make an inflated claim, such as exaggerating a neck injury. Injured persons obviously want to be compensated well, but it is crossing the line when a person claims for pain or injury that is well in excess of the actual damage sustained.
- Hard insurance fraud is also called premeditated insurance fraud and occurs when a person devises a way to bring about an insurance claim. This type usually includes a deliberate action, such as staging an arson or vehicle theft, and intentionally causing an accident.
Consequences of a fraudulent claim
The consequences of pursuing a fraudulent personal injury claim can be both civil and criminal penalties, and will result in you losing any right to damages you may have had for the actual injuries sustained in an accident.
The civil consequences include the following.
- Denial of award from a claim. What this means is that the insurance company will refuse to pay you any injury compensation for any losses associated with your claim.
- You may be reported as an insurance risk and could find it difficult to obtain any insurance coverage in the future.
- Revocation settlement or lawsuit award. What this means is that If you were awarded any money by the insurer, and it is then discovered that you have been fraudulent in making your claim, they may seek recovery of the monies paid to you as well as any costs involved in the claim and recovery of the insurance monies paid to you.
The criminal consequences that can arise frommaking a fraudulent claim can include prosecution, fines and even imprisonment in serious cases.
To ensure your personal injury claim is handled properly and your claim is not put at risk, you need to contact The Personal Injury Lawyers immediately if you think you may have an injury claim. Phone us on 1300 782 202 for our free claim information pack.