Insurance Fraud: Understand the Risks Before It Costs You More
Insurance fraud may seem harmless to some, but it is a serious offense that can impact your financial stability, your access to future coverage, and even lead to legal consequences. By understanding how fraud is defined and punished, you can protect yourself, your household, and your future borrowing capacity.
In 2026, insurers rely more than ever on shared databases, digital traceability, and advanced fraud detection tools. A single fraudulent act can leave long-term marks on your financial profile and complicate access to credit or insurance contracts.
Insurance Fraud Costs Everyone
Every year, insurance fraud costs households an average of €150 in additional premiums. Among the most common situations are car theft, exaggerated claims, or completely false declarations.
Beyond the financial impact, our legal experts warn: attempting to deceive your insurer can trigger serious criminal and contractual consequences, leaving a long-lasting footprint on your financial reputation.
How Insurance Fraud Is Defined and Why It Endangers Your Financial Future
Insurance fraud does not only involve spectacular scams. It often starts with “small omissions” or “slight exaggerations” that can, in the eyes of the insurer and the law, be qualified as fraud. Understanding this distinction helps you stay compliant and protects your access to cover and credit.
Types of Insurance Fraud
Insurance fraud is generally divided into two main categories: fraud committed at the time of signing the contract and fraud committed when declaring a claim. In both cases, the objective is to obtain an undue advantage from the insurer by providing incorrect, incomplete, or falsified information.
Fraud at the time of contract subscription occurs, for example, when you deliberately underestimate or overestimate the value of an insured asset, insure non-existent property, or intentionally omit important data (such as previous claims, risk factors, or your actual use of a vehicle or property).
Fraud in claims declarations appears when a policyholder inaccurately describes the circumstances of a claim, exaggerates the scale of the damage, claims for pre-existing damage, or provides falsified supporting documents such as invoices, repair quotes, or witness statements.
Everyday Examples You Should Avoid
Many fraud attempts originate in situations that may appear trivial at first glance. For instance, slightly increasing the estimated value of stolen items, claiming for damage that was already present before an accident, or concealing information about how an incident actually occurred.
These actions are often perceived as a way of “recovering what you pay in premiums”, but insurers and authorities treat them as deliberate deception. With modern data-sharing systems and claim history tracking, these inconsistencies are easier to detect than ever in 2026.
Instead of taking that risk, it is far better to be fully transparent. This approach protects not only your current contract but also your ability to obtain favorable insurance and credit terms in the future.
Sanctions in Case of Insurance Fraud
From a strictly criminal standpoint, insurance fraud is not always defined as a separate offense in the Penal Code. However, several legal qualifications can be used by insurers and authorities, including fraud, forgery, false testimony, or even arson in the event of deliberately caused damage.
In parallel, the insurer can rely on terrestrial insurance contract law to cancel or terminate the policy. A key distinction is made between intentional fraud and good faith omission: unintentional breaches are generally treated more leniently, often leading to an adjustment rather than full termination.
When the insured person has intentionally caused a claim or deliberately misled the insurer, the consequences are severe: the insurer is not obliged to pay any compensation and may retain the premiums already paid. Additionally, legal proceedings may be initiated depending on the seriousness of the misconduct.
Beyond simple contract termination, being flagged as a fraudster can therefore have a lasting impact on your ability to access not only insurance but also certain forms of financing, given the close link between risk profile and creditworthiness.
Recommendations: Transparency Is Your Best Protection
The most effective way to avoid accusations of insurance fraud is to prioritize honesty and clarity in all your interactions with your insurer. Provide complete, accurate, and up-to-date information when signing your contract and when reporting a claim, even if the situation seems unfavorable in the short term.
Keep copies of your correspondence, invoices, and expert reports to support your declarations and avoid misunderstandings. If you are unsure about how to declare an incident, do not improvise: contact your insurer or a legal expert for advice before submitting your claim.
This transparent approach not only protects you from severe sanctions but also strengthens your profile as a reliable policyholder. In the long run, this can help you benefit from better premiums, smoother claims handling, and more advantageous conditions when applying for credit or additional insurance products.
Key Advantages of Staying Fraud-Free
Stronger Financial Profile
A clean record with insurers helps you maintain a solid financial reputation, which can be a valuable asset when applying for credit or negotiating conditions with lenders.
Easier Access to Insurance
Without fraud records in databases like Datassur, you keep full access to a wide range of insurers and products, often at more competitive rates.
Better Protection When You Need It
By respecting your contractual obligations, you maximize your chances of being fully covered and quickly compensated when a legitimate claim occurs.
Want to secure your financial future with compliant insurance and responsible credit solutions? Take the first step now.
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