What could be a consequence of a fraudulent claim aside from denial of the claim?

A consequence of a fraudulent claim is that legal action may be pursued by the insurer. Insurance fraud is a serious offense, and when a claim is found to be fraudulent, the insurer has the right to take legal actions against the individual who committed the fraud. This can include civil lawsuits seeking damages or even criminal charges, depending on the nature and severity of the fraud.

Pursuing legal action serves not only as a means of financial recovery for the insurer but also acts as a deterrent to prevent others from attempting to commit similar fraudulent acts. Insurers aim to protect their interests and maintain the integrity of their operations, and legal action can be an essential step in addressing and rectifying fraudulent claims within the industry.

In contrast, the other options presented do not logically follow as consequences of a fraudulent claim. For instance, increasing coverage limits or offering a refund of premiums would not be appropriate responses to fraud, which typically results in penalties for the claimant. Similarly, lower interest rates on future policies would be unlikely, as insurance companies may view the individual as a higher risk following a fraudulent claim, potentially leading to higher premiums in the future.