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Insurance Bureau of Canada/ns/Home/Home Fraud/Exaggerating Claims

Exaggerating Claims

​Inflating or exaggerating the extent of an insurance claim is a crime. Insurance crime increases insurers' claims costs and, ultimately, costs everyone in the form of higher premiums.

​Insurers will pay you for your reported losses according to the levels of coverage, deductibles, etc., outlined in your property policy. Your adjuster will review your receipts and the other details of your claim to ensure you receive the appropriate value and service for the policy you purchased. Insurance cannot be a source of profit.


Types of Claims Fraud

People sometimes exaggerate the scope of their losses or fraudulently claim a loss for something that they never actually owned. Examples of exaggerated claims include:

  • After a basement floods and water damages a freezer, expensive AAA steaks are fraudulently listed as among the spoiled frozen foods
  • A pearl necklace is lost and the claimant exaggerates the size and value of the pearls
  • After a fire, items such as furniture, jewellery or art that were never owned or on the premises are claimed
  • A claimant submits a receipt that belongs to someone else when a claim is made.

Penalties for Making a False Claim

If an insurance adjuster suspects that even a portion of claim is exaggerated, payment for the entire claim – even the valid losses – could be put in jeopardy. Individuals who have fraudulent claims turned down may have difficulty obtaining insurance in the future. Because inflating or exaggerating a claim is a crime, insurance companies may contact the police to press charges.

There is no such thing as a victimless crime. Everyone who buys insurance pays the price of insurance fraud and inflated or exaggerated claims in their premiums.