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What counts as insurance fraud and what are the consequences?

This article is for Marshmallow policyholders who want to understand what constitutes insurance fraud and how it might affect their cover.

Updated today

Insurance fraud is taken very seriously. It’s a criminal offence in the UK and costs the industry over £1 billion every year. At Marshmallow, we work hard to detect and prevent fraud to protect honest customers and keep premiums fair.

Some people commit insurance fraud without realising it. That’s why it’s important to know what it means and how to avoid it.


What is considered insurance fraud?

Fraud involves providing false or misleading information to an insurer or failing to share required information. This can happen when taking out a policy, during the policy period, or when making a claim.

Examples of common types of fraud:

  • Misrepresentation (quote manipulation):
    Giving incorrect details to reduce your premium or get a policy you might otherwise not qualify for. This includes:

    • Stating a different job title

    • Providing the wrong address

    • Changing the date you bought your car
      This could result in your policy being voided and claims being refused.

  • Withholding important information:
    You must disclose any information that affects your insurance risk. Failing to do so is considered fraud. For example:

    • Not declaring previous claims or cancellations

    • Hiding motoring convictions

    • Not mentioning a County Court Judgment (CCJ)

  • Fronting:
    Naming someone else (e.g. a parent) as the main driver when the actual main driver (e.g. a child) is only listed as a named driver to reduce costs. This is illegal and can void your insurance.

  • Undisclosed part-time work:
    If you have a part-time or temporary job, you must check with us. Some types of work may not be covered under your policy. Hiding this could invalidate your cover.


What does Marshmallow define as fraud?

According to our policy terms, fraud occurs if you or anyone acting for you:

  • Intentionally, recklessly or fraudulently conceals or misrepresents any information when:

    • Buying your policy

    • Renewing it

    • Making a claim

  • Engages in any fraudulent activity related to the policy

  • Makes a false or exaggerated statement to support a claim

  • Submits a claim that is wholly or partially false

This includes attempts to manipulate quotes or mislead our team at any stage.


What are the consequences of insurance fraud?

If fraud is detected, we may take the following actions:

  • Cancel or void your policy from the date the fraud occurred

  • Refuse to pay any fraudulent claims

  • Recover money paid out on any false claims, including associated costs

  • Report the incident to:

    • The police

    • Anti-fraud databases

    • Other financial services organisations


How can I avoid committing fraud?

  • Always be honest and accurate when entering your details.

  • Double-check all information before buying a policy or submitting a claim.

  • Tell us immediately if your circumstances change, such as:

    • Moving house

    • Changing jobs

    • Taking on a second job

    • Adding or removing drivers from your policy

  • Speak to our customer support team. We’re happy to help clarify anything.


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