Under the Insurance Act 2015, what action does an insurer take regarding a fraudulent claim?

Under the Insurance Act 2015, if a claim is found to be fraudulent, the insurer has the right to not only reject the claim but also to terminate the insurance policy. This principle is grounded in the law’s intent to prevent fraud in insurance contracts, as fraudulent claims undermine the integrity of the insurance system and can lead to higher costs for all policyholders.

When a claim is deemed fraudulent, it indicates that the policyholder has misrepresented facts or has engaged in dishonest behavior to obtain a benefit they are not entitled to. Therefore, the law provides that insurers can void the contract from the point of the fraudulent act, effectively releasing them from any further obligations under the policy. This means that the insurer is not liable for the fraudulent claim and has the legal right to terminate the policy, further protecting the insurer and the integrity of the insurance market.

The other possible actions indicated in the other options, such as paying the claim, being liable regardless of the fraud, or offering a partial payment, do not align with the provisions set out in the Insurance Act 2015 regarding the treatment of fraudulent claims.