Couples Beware – Are you unwittingly committing wedding insurance fraud…?
This is an unusual headline for a wedding blog post, but hey we are in “unprecedented times” (theres covid Bingo point one)
working in an event sector of over 500,000 suppliers and our standing as it is we pretty much get to see and hear everything going one and there is a real worrying issue that is causing literally thousands of couples to unwittingly commit a crime, so lets get down to the core of the issue..?
Point One – Wedding insurance, Many we know are refusing to pay out, but a few quite often are including for example John Lewis (policy dependent). Now what many couples may not realise is that when John Lewis or any other insurer pays out on a claim they don’t simply write off the cost with a smile despite all that money coming in from insurance premiums. They will make every effort possible to subsequently claim those funds back from the original supplier.
This practice is based largely on the idea that the original contract was frustrated, something still untested in court. Now in reality this is a bone of contention with the vast majority of legal expertise stating Contract Frustration is not a factor in the majority of cases and insurance companies should be paying out and taking it on the chin. However this isn’t stopping insurers from using every tactic available including legal threats of debt collection against venues and suppliers..
How does this affect you as a couple you may ask..?
For the most part it doesn’t, if you’ve paid suppliers and you are unfortunately outside of the suppliers refund policy and you are lucky enough to have a valid insurance claim then you should get paid out allowing you to rebook your suppliers at a different time starting your contracts and deposits again. (Technically your claim is only valid if your supplier is unable to move your date, although most insurance companies are only finding out after they have paid the claim which could present you a problem in itself)
The reality of what is happening…
We are seeing case after case literally by the hundreds and in to thousands of couples that are falling foul of committing possible insurance fraud on mainly two counts..
- You are claiming for suppliers that have offered suitable alternative dates, or it would have been possible for your wedding to go ahead albeit with restrictions. Simply taking the chance to do it differently or picking a date certain suppliers cant do, actually likely puts you in breach of most contracts and pretty much automatically makes any attempt to claim frustration of contract null and void it’s also likely to be something that wouldn’t be covered by most insurers if they found out your wedding could have gone ahead.
- Secondly and this is the one we are seeing as the biggest risk to couples of being accused of fraud, claiming from your insurance and then asking the supplier to use the monies already paid for another date, product or event , on the surface of it this may seem like a clever move because your wedding insurance has paid out and you get to use deposits already paid against your new date, surely thats a win win scenario right…?
Well lets be clear this is perhaps unwittingly deliberate insurance fraud or thats how it would be viewed by both the insurance company and in a worse case scenario any investigating police force, we will look at consequences in a minute.
Whilst seemingly a smart and harmless move there is a very very strong likelihood that upon paying your claim as a couple they will then write to your suppliers asking for the money back and your supplier will quite rightly respond by letting them know that the funds are actually still being used, or that they offered multiple dates which you refused you are now immediately and seriously at exceptional high risk of having your claim flagged as fraudulent.
The Consequences of Wedding Insurance Fraud..
- At best they will write to you suggesting you’ve made a mistake on your claim and that you now owe them that proportion of your claim back
- Still a best case scenario as well as asking for their payout back they may decide to look more closely at the rest of your claim, let’s hope you have not spent it already?
- Next option and also very very likely if they consider the claim to be suspicious or even partially fraudulent, you will find your details added to the insurance fraud database, this will affect the price of future premiums, affect your ability to obtain all sorts insurance, see all future claims more deeply investigated and even affect your credit rating and ability to obtain for example a mortgage.
- If things are taking a real turn for the worse and your claim is flagged as potentially deliberately fraudulent, you may find yourself reported criminally for insurance fraud which can carry the risk of a criminal record, large fines or even a prison sentence…
It’s fair to say the level of consequences probably reflect the proportion and overall value of the claim, so if its just one supplier they may consider that an honest mistake. If it’s half or more of your suppliers and or venue then chances are they won’t be happy and you may have the proverbial book thrown at you.
How to avoid falling foul of unwittingly committing wedding insurance fraud
Well this is fairly simple and should be pretty obvious, insurance is there to pay out against loss, with the principle idea of financially at least, putting you back where you started before the loss. Insurance isn’t there for anybody to profit from..(except the insurers of course 😉
If you are planning to ask a supplier to move the date, provide a different product or service then don’t add that to your insurance claim, likewise if you have made a claim and had a payout and decide to still work with the supplier in someway, understand that your financial transactions and contract start afresh with a whole new deposit, as your supplier may be paying your original deposit back to your insurer
I would like to say I hope you found this interesting however its insurance it doesn’t get any more boring than that. However I really do hope this prevents at least one or two couples from making a mistake with a wedding insurance claim they may later deeply regret, its also a little awkward for your suppliers too, as they know that anything they tell the insurer will see you in trouble but with little choice in the matter, and nobody wants that we all just want you to have the wedding day of your dreams, even if it is later than planned…
Finally, every insurance policy is different, if in doubt ask your insurance company the question, they are there to help.