Fraudulent exaggeration occurs when the policyholder falsely inflates the value of their claim in order to receive more money from their insurer. Critically, the policyholder doesn’t need to falsify documentation in order to fraudulently exaggerate their claim. For example, they may have purchased an item several years ago for £2,000 and since then misplaced the receipt. However, if they tell the insurer it was purchased for £4,000, this would be classified as fraud.
Alternatively, the policyholder may exaggerate the extent of the damage to their possessions or claim for damaged contents which they didn’t own.
In terms of motive, it could be to cover the cost of the excess or to get reimbursement for other parts of the claim that might not be covered or be subject to a policy limit. Or it could simply be down to desperation and opportunity.