Fudging details can come back to bite
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 Kiwi 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. 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 hardhitting. 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.’’
Stevens 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 worth of repairs to 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
‘‘We’ve seen some creative, quite elaborate storytellers get caught out.’’ Insurance and Financial Services Ombudsman Karen Stevens
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,’’ 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.’’