There's nothing fraudulent about it. Fraud would be if he were asking for the receipt for purposes of filing a claim, which it doesn't sound like he is doing.

I think he's just trying to purchase the amount of insurance that he feels would truly cover his loss. The insurer is going to base their premium on the amount of coverage he is requesting. Unless the empeg has already been stolen or he's planning on filing a phony claim, there's nothing dishonest about it.