Should lodging of fraudulent insurance claims be made punishable ?

Very intersting and thought provoking question has come before us and it is ;
Should lodging of fraudulent insurance claims be made punishable ?

I came across an interesting news item which has originated from U.K. and it may be an eye opener for many. This judgement also raises the question whether Insurance Company should take the case to such level where the client (even if he has lodged fraudulent insurance claim) is jailed.

You will find the answer in the last 2 lines of the news item in which the statement of the insurance company is as follows;
Andrew McBride, claims director for QBE, said: "QBE works closely with all its policyholders to protect their interests and at the same time offer them outstanding service in claims handling. Fraudulent activities such as this have the potential to raise costs and risks for our other clients."

Yes it is true that those who get bogus claims are contributing towards increase in premium being paid by the honest customers. In this case the figure quoted by the insurance company is UK pounds 40 or say Rs 3100.I wonder how much is being paid by many of us, who are honest customers of Indian Insurance companies.

Let us go to the news item to have the details;

In this case three people have been jailed for 12 months after making fraudulent insurance claims following a coach crash at a wedding.

The bridegroom Andrew Singh and his parents Graham and Niramella Singh were each sentenced at Manchester Crown Court to 12 months for perjury and nine months for conspiracy to defraud. The sentences will run concurrently.

The court heard that the wedding in Preston in July 2004 resulted in 73 personal injury claims resulting from two minor accidents in coaches taking guests to the reception.

One coach collided with a car while another struck a wall at Chipping Village Hall where the reception was taking place.

Of the 27 claims that finally reached court, 25 - including those of Andrew Singh and his parents - were thrown out after a wedding video brought in by the claimants themselves showed many of them dancing enthusiastically at the reception. Both Andrew Singh and his father Graham were seen being carried aloft by guests.

The Singhs denied that a wedding video had existed prior to the trial but when other witnesses gave evidence to suggest that large numbers of the claimants were not present on the coach, the Singhs produced the video in an attempt to establish that they were on the accident coach.

Commenting on the case, Ian Birkinshaw of DWF, who acted on behalf of QBE Insurance in the case, said: "Fraudulent claims are a burden on honest drivers, adding £40 on to the cost of every insurance premium. In this case the claimants' actions also resulted in a two-week civil trial, which cost an estimated £250,000."

He added: "Graham, Niramella and Andrew Singh perjured themselves in court and had children in the witness box claiming to be injured when they were not even on the coach. The judgement sends out a very strong message that the courts will not tolerate this type of behaviour."

Andrew McBride, claims director for QBE, said: "QBE works closely with all its policyholders to protect their interests and at the same time offer them outstanding service in claims handling. Fraudulent activities such as this have the potential to raise costs and risks for our other clients."