Types of fraud

Find out about the 2 types of insurance fraud and how they differ.

Two types

There are 2 types of insurance fraud:

  • soft insurance fraud
  • hard insurance fraud

Soft insurance fraud

Soft insurance fraud is insurance fraud that’s only committed when someone is provided with an opportunity through circumstance or chance.

Soft insurance fraud can include claiming

  • for items that were never owned or weren’t lost when making an otherwise legitimate insurance claim
  • that items lost were newer, flasher or worth more than they actually were
  • that items lost in separate incidents were all lost in the same event to make their total value higher than the policy’s excess
  • that someone else was driving a vehicle that was involved in an accident in order to pay a lower excess
  • that one person in a flat owned everything that was stolen or damaged because one member of the flat doesn’t have insurance
  • for things lost or damaged in separate events on the same claim, so only one excess has to be paid
  • for the same thing on multiple insurance policies or claiming for the same loss more than once.

Most of the time, the person committing soft insurance fraud doesn’t know it’s illegal or, if they do know, think it’s an acceptable thing to do. Reasons for thinking this can include believing it to be common or seeing it as acceptable because of how much they’ve paid in insurance premiums in the past. This is called rationalising.

Find out more about rationalising and why people commit insurance fraud

Soft fraud is the most common type of insurance fraud.

Hard insurance fraud

Hard insurance fraud is insurance fraud that has been planned with the primary intent to deliberately deceive for a financial gain.


  • deliberate
  • calculated
  • premeditated
  • repeated.

Hard insurance fraud is done deliberately and with the aim of getting an insurance pay-out from the loss or damage that the policyholder would otherwise not be entitled to.

It can include

  • staging a burglary 
  • crashing a car
  • setting a house or car on fire
  • damaging property, such as a smartphone, because a newer model has been released
  • getting a friend, acquaintance or relative to do any of the above.

For an example of hard fraud, check out this article from the Law Society.

Keep reading: Detecting fraud