Story about back-of-van 'romantic meeting' sparks insurer suspicion
Sunday, 5 August 2018
Picture this – you're having a romantic interlude in the back of your van and you accidentally knock over a petrol can. Then, when you're stopping for a cigarette outside, there's a boom.
Sound plausible? One insurance company didn't think so.
Petrol was everywhere in the van, including the driver footwells; the fire service was only called 38 minutes after the fire began; and the man had been trying hard to sell the vehicle.
The story of the 'romantic meeting' with his wife was rejected, the man's insurance claim on the van was denied and a complaint to the Insurance and Financial Services Ombudsman (IFSO) scheme was also turned down.
**READ MORE:
* Ombudsman warns fraud a serious problem for insurers
* Attempts at insurance 'fraud' can never be lived down**
He may find it tough to get insurance elsewhere.
Now Insurance and Financial Services Ombudsman Karen Stevens is concerned that, like that man, many New Zealanders don't understand that fudging the details of their insurance claims can have significant consequences.
It's estimated that up to 10 per cent of all insurance claims are fraudulent - up to $250 million a year.
'The long-term consequences of insurance fraud are hard-hitting. Declined claims are the tip of the iceberg,' Stevens said.
'If your insurance policies are cancelled, and your name is listed on the Insurance Claims Register (ICR), this makes it difficult to get future insurance, which can be devastating, for example, if you're trying to buy a house.'
She said people should expect insurers to thoroughly check their claims.
'We've seen some creative, quite elaborate storytellers get caught out.'
In another case her office dealt with, a Christchurch man produced five fake invoices for $91,500 of repairs on his earthquake-damaged home.
He admitted he'd falsified the invoices but said he had done the work with his own time and money and the invoices were the only way he could see to be reimbursed.
His claim was declined, no further payments were made under his ongoing claim for earthquake damage, and his policy was cancelled. IFSO didn't uphold his complaint, either.
'The evidence required for insurers to prove insurance fraud is strong, and this case ticked all the boxes. The insurer could prove the man made a deliberately false claim to gain a greater benefit than he was entitled to,' Stevens said.
'There are varying degrees of dishonesty, and the law recognises a difference between a fraudulent claim and a false or dishonest statement in support of what would otherwise be a valid claim.
'But the consequences for both fraud and dishonesty are more serious than most people think. When we investigate complaints involving dishonesty, false statement or fraud, we look at the policy, and whether the insurer has been able to provide evidence to the legal standard.'
Points to note
If you provide false information and then retract your statement, this does not change your original statement or the consequences
A woman made a claim for a pair of lost glasses, then admitted the glasses were simply scratched and worn, and she just wanted insurance cover. All of her policies were subsequently cancelled, and details of her claim are now on the ICR.
A statement has to be deliberately false for an insurer to prove fraud has occurred
When a homeowner made a contents claim for a stolen camera, cell phone, and jewellery, she provided photos as proof of the ownership. During the insurer's investigation, metadata showed that the photos were taken with the allegedly stolen camera and cell phone after the date of the burglary. The entire claim was declined on the basis of fraud.
Insurers can decline a whole claim - not just the part you give false information about
In the Christchurch fake invoice case, the insurer not only declined the claim and cancelled the policy, it recovered the payments it had already made under the ongoing claim.
If someone gives false information while making a claim under your policy, this will affect you
In a car insurance case, the insured's husband tried to withdraw a claim as he had told a 'bit of a lie' about being hit from behind by another car. But it was too late, and an alert was placed on the ICR against both the husband and wife, as they were joint policyholders.