Zurich UK and insurance risk firm BLM have partnered to launch a best practice guide for the insurance industry.
This particular guide advises professionals on how to detect and fight fraud related to escape of water (EOW) claims.
The new guidance outlines the scale of the problem using ABI data, which states that its members pay out approximately £2.5m every day on EOW claims.
It is designed to highlight the key fraud indicators that should be considered when dealing with reported EOW damage to enable early detection of fraudulent claims.
These include questions that loss adjusters and insurers can ask, as well as the factors that they should be alert to during investigations on these claims.
Paul Redington, regional major loss property claims manager at Zurich, said: “The overwhelming majority of claims we receive are perfectly genuine. However, over the last few years we have been detecting an increasing volume of dishonest escape of water-related notifications.
“When we look at the staggering numbers collected by the ABI in terms of the scale and the cost of the EOW problem, it is important that we collaborate as an industry and use our collective expertise to stop as many fraudulent claims as we can to protect our genuine and honest customers.”
He added: “We have worked with BLM to produce this guide with the hope that it will help fellow claims professionals, loss adjusters and intermediaries to spot the warning signs early on in the process.
“It looks to provide guidance in what questions to ask when dealing with EOW claims, so as to allow genuine claimants receive the compensation they deserve and stop the dishonest ones in their tracks.”
John O’Shea, partner at BLM, said: “Fraudulent EOW claims can inherently be more difficult to detect.
“However, by bringing together our property and fraud experts, technology, advanced analytics and intelligence resources we are able to offer insight and assistance to both aid prevention and identification of such risks for our clients.”
He added: “We continue to collaborate with the industry on these matters and to help our clients protect themselves and their innocent policyholders from the implications of fraud.”