Om­bud can’t help if you’re not hon­est with your in­surer

Peo­ple who might have got away with de­fraud­ing their in­sur­ers in the past by spin­ning a yarn are now be­ing caught out, thanks to “big brother” tech­nol­ogy. re­ports

Weekend Argus (Saturday Edition) - - FRONT PAGE -

DIS­PUTES over mo­tor ve­hi­cle claims give rise to a large pro­por­tion of the com­plaints to the of­fice of the Om­buds­man for Short-term In­surance. Last year, they made up al­most half ( 49%) of the com­plaints and ac­counted for 60% of the rand value re­cov­ered by the of­fice on be­half of con­sumers, ac­cord­ing to the 2016 an­nual re­port of the om­buds­man, Deanne Wood.

In her re­port, she warned, how­ever that in­sur­ers are us­ing the in­ter­net, so­cial me­dia and “big- brother” tech­nolo­gies to catch out con­sumers who in the past may have suc­ceeded in pre­sent­ing “al­ter­na­tive facts” to in­surance com­pa­nies. She said a com­mon il­lus­tra­tion of this – with which her of­fice is “very fa­mil­iar” – is in­for­ma­tion about the reg­u­lar driver of a ve­hi­cle.

Wood said older drivers pay sig­nif­i­cantly lower pre­mi­ums than younger drivers.

“The dif­fer­ence in pre­mium can be sig­nif­i­cant, cer­tainly sig­nif­i­cant enough to en­cour­age con­sumers to pro­vide in­ac­cu­rate in­for­ma­tion.”

She also said that a dis­pro­por­tion­ate num­ber of claims for ve­hi­cles that ex­ist only on pa­per were sub­mit­ted to her of­fice.

Wood said in­surance was taken out for non-ex­is­tent ve­hi­cles us­ing fraud­u­lent reg­is­tra­tion pa­pers, and the theft of the ve­hi­cle was re­ported in an at­tempt to re­ceive a cash pay-out.

“In an ef­fort to avoid claims of this na­ture, many in­sur­ers re­quire ve­hi­cles to be in­spected be­fore in­surance kicks in. In my year in of­fice, I learnt a lot about the high lev­els of cre­ativ­ity be­hind op­por­tunis­tic con­sumers look­ing to make a quick buck from the in­surance in­dus­try.”

NO PAY­MENT, NO COVER

The om­buds­man’s lat­est quar­terly Brief­case newsletter in­cludes a case study with a stern les­son for con­sumers: if you don’t pay your pre­mi­ums, don’t ex­pect to be cov­ered.

Mr M, who in­sured his car with King Price In­surance, was in­volved in a col­li­sion on Oc­to­ber 8 last year.

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