Heightened fraud risk in the wake of recent storms – McLarens

Brokers and insurers should guard against the heightened risk of fraud following a slew of recent weather-related events in the UK and Ireland, McLarens has warned.

The loss adjuster told insurance claims professionals to be vigilant as fraudsters look to take advantage of recent surge events.

The warning came after Storm Babet struck parts of eastern Scotland last week (19 and 20 October 2023), with a red weather warning issued due to heavy rain and strong winds.

This caused power shortages across Scotland and Northern England and homes had to be evacuated as wind and rain caused damage to properties.

Brendan Gillooly, head of investigation at McLarens UK and Ireland, explained: “As we grapple with the aftermath of successive weather-related events, the risk of fraudulent claims looms large, threatening to exploit the pressures insurers face when dealing with an influx of genuine claims.

”Severe weather events such as Storm Ciaran tend to result in numerous legitimate insurance claims for property damage.

“Fraudsters, aware of the overwhelming volume of claims, seize the opportunity to submit bogus or exaggerated claims during such surge environments.”

Gillooly pointed out that the three specific areas of risk were opportunistic fraud, a rise in false documents and ChatGPT.

”Opportunistic fraudsters may target dilapidated buildings affected by genuine weather events,” he explained. 

”They may attempt to include unaffected areas in their scope of work or claim additional damages to inflate their payouts. Even aging stock that has languished in inventory may suddenly appear as damaged.

“Some claims may only surface weeks or even months after the initial event, emphasising the need for meticulous attention to detail at every touchpoint.”

Storms ahead

Gillooly’s comments came after came after the Met Office issued a further weather warning for parts of Scotland earlier this week as Storm Ciaran approached the UK.

In its yellow weather warning, it said that persistent and occasionally heavy rain may lead to some flooding and transport disruption in places.

Gillooly added: “As severe weather events continue to impact various regions, it’s crucial to maintain a robust and detailed investigation process.

“Collaboration and vigilance are key in combating insurance fraud. If anything appears amiss or suspicious, we encourage insurance professionals to reach out for assistance and guidance.

“A simple conversation may uncover potentially fraudulent activities.”