For contracts formed prior to 12 August 2016, the position at common law is that the insurer will not be liable where an insured makes a fraudulent claim. For contracts formed after 12 August 2016, this fraudulent claims rule has been codified by the Insurance Act 2015. 1 Under either regime, the question of what amounts to a fraudulent claim is a matter for the courts. Where a claim has been fabricated or dishonestly brought about, or where an insured has fraudulently exaggerated its loss, the full claim is forfeit (even any genuine part). 2 The consequences of making a fraudulent claim can therefore be very severe upon an insured.
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