Understanding the roles of loss-premium comparisons and insurance coverage in customer acceptance of insurance claim frauds

Purpose – The purpose of this paper is to examine the impacts of loss-premium comparisons (loss-premium comparison refers to the amount of an actual loss compared to the premium level) and insurance coverage on customer acceptance of insurance claim frauds, based on Adams’ equity theory. Customer perceptions of insurance frauds have been studied in recent years. Design/methodology/approach – A questionnaire was used as an instrument in the research. The hypotheses were tested using a 3 loss-premium comparisons (the actual loss amount was lower than, or equal to or higher than the annual premium) × 2 insurance coverage (the loss is covered or not covered by the insurance policy) experimental design in a claim application context. Findings – The results showed that loss-premium comparisons and insurance coverage significantly affect the final claim amounts. According to the results, age and education may relate to customer acceptance of insurance claim frauds. Originality/value – This study proposed a first empirical investigation into the relationship between loss-premium comparisons and customer ethical decision making in the customer frauds. Insurance coverage is also specifically considered in the study.