Insurance companies rule out fraud in fires

DUBAI — With fires breaking out in different commercial establishments of Dubai and Sharjah recently, rumours are rife that they might be the result of arson. It was alleged that the establishments might have been set on fire deliberately to claim insurance money.

By Asad Iftikhar Shafi

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Published: Fri 11 Aug 2006, 10:35 AM

Last updated: Sat 4 Apr 2015, 6:08 PM

But the chances of an insurance fraud happening in the UAE are very slim. In fact insurance frauds are less than five per cent in the country, insurance companies said.

According to the insurance companies, “This is mainly due to the fact that stringent precautionary measures are being taken by the insurance companies before issuing an insurance policy for anything, whether it is property, marine, life, health or automobile insurance. Prospective customers are thoroughly vetted and a background check is carried out before they are provided with insurance.”

Ken Rodriguez, who has been working for the last six years in a leading insurance brokers company, said, "We are extremely careful before we issue any sort of insurance policy. It doesn't matter whether the insurance policy is of a small or a large amount. Each and every case is treated as special. After thoroughly satisfying ourselves of any doubts that we may have about the prospective client, do we issue a policy. After all it is a matter of grave risk and financial loss to us if we start issuing insurance policies to fraudsters. This could lead to the ruin of our company."

"We don't just give insurance to any person or company who applies for it. A thorough investigation is carried out and a lot of paper work is required from the prospective client to ensure that there won't be any chance of fraud in the future. Also we usually do not prefer to provide an insurance policy to someone who has already been involved in disputes or litigation over insurance money with some other insurance company. In our field it is better to be safe than sorry, explained Kamal Dhani, who has been working in this field for the last 17 years.

It is due to these reasons that at the time of an accident, insurance surveyors carry out detailed investigation, apart from the one conducted by the police.

Each and every insurance company has surveyors who are responsible for carrying out investigations to find out whether the claim is genuine or fraudulent, says Zulfiqar Ali of Adamjee Insurance. Besides company surveyors, there are also independent surveyors who do not work for any particular company.

The surveyors are appointed by an insurance company and work alongside the police but the two may differ on their analysis. There have been many cases in which the police and surveyors had different viewpoints about an accident that had taken place. More often than not, the decision taken by the police prevailed.

Credit also goes to the Ministry of Economy and Planning which is very vigilant as far as insurance claims are concerned. It is imperative for all insurance companies, brokers and surveyors working in UAE to be registered with the ministry.

No society is perfect and UAE also has its share of insurance frauds. But compared internationally they are very few. Also the amount involved in them is miniscule. Most of these frauds are automobiles or health related.

Natalie of Nasco Karaogian Insurance said "Our company provides health insurance. People come to us, fill forms and based on the information that they provide, are given insurance. When someone files an insurance claim, what we have to determine is whether the condition was pre-existing or the client was affected by it after he took insurance with us. If it is pre-existing, then the claim is rejected. If a dispute arises, then a panel sits down with the client's doctor and they try to reach a decision. If they can't agree, the case goes for arbitration.

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