Insurance companies to accept collateral lies, says Supreme Court

December 11th, 2019

Supreme Court verdict suggests that insurers can accept collateral lies

In a record breaking judgement, the Supreme Court has made new rules for all kinds of household insurance policies. Until now, if the insurance company finds out that people who have lied or fabricated some part of their claim then they would reject the whole claim. However, the court has passed the rule that if the ‘collateral lies’ do not affect the validity or value of the claim then it cannot be rejected.

The judgement has been given when a Dutch cargo ship made a claim for £2.4m due to the flood damage caused by bad weather. The staff of the ship lied that they could not follow the alarm as they were in heavy waters. On investigation, this was found to be completely untrue and a deliberate attempt to get the claim. The court still passed the claim as the damage to the ship happened actually due to poor weather condition and the fabrication effort did not change the value of the claim.

The court has ruled out any chances of taking things for granted. While it suggests insurers to accept fraudulent claims that do not affect the value or validity of the policy, it certainly does not encourage insurance frauds. The insurance guidelines will stay unaffected, only thing is that honest customers should not suffer due to minor mistakes. If the fabrication was made just to save themselves on good grounds then it can be considered by the insurer.

According to the judgement, if anyone tries to inflate the value of an existing claim then it cannot be accepted in any case. False claims to deceive the insurance company and done purposefully would be at risk of rejection. So, do not try to manipulate things to get higher benefits from the insurer. The only advice would be to be honest to your insurance provider and deal with things with a sane mind and honest heart.

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