False claims are not only costly but also a crime
Ombudsman finds against dishonest client
A recent case handled by the Ombudsman for Short-term Insurance (OSTI) has laid bare the dangers of lying when putting in a claim on your policy. Blatantly lying or omitting the truth when claiming puts you on a slippery slope.
Simply put, lying when claiming against your policy means you’re committing insurance fraud.
The insurer had rejected a claim and cancelled the policy on the basis that the insured had intentionally provided dishonest information concerning an engagement ring and computer tablet to receive a benefit.
It added that, given the value of the ring, it found it peculiar that the insured had not specified it in the policy. Concerning the tablet, the insurer said that the insured was claiming for the same device which was stolen, blacklisted, and last used in March 2016.
The consumer then approached the OSTI for recourse.
Senior assistant ombudsman Ayanda Mazwi found that the discrepancies concerning the engagement ring and the tablet reasonably indicated that the insured claimed for items lost in previous incidents.
She said that the policy wording also had an exclusion, which stated that the value of jewellery may not exceed one-third of the sum insured. The sum insured in terms of the schedule was R302 500.
According to the consumer’s submissions, the total value of jewellery items stolen in this incident alone, was about R200 000, exceeding the one-third limit. Furthermore, on its alleged value, the engagement ring would fall within the locked safe warranty.
“The warranty further stated that ‘in the event of a claim, there must be visible, forcible and violent entry to the safe’,” said Mazwi.
“These arguments were not put forward by the insurer as grounds for declining liability. The terms and conditions of the cover also placed a contractual obligation on the insured to give the insurer true, correct, and complete information concerning the claim,” Mazwi added.
She explained that the purpose of this obligation was to allow the insurer to establish the facts surrounding the loss and to determine its liability for the claim. The assessment findings herein pointed out material discrepancies on this claim.
“When discrepancies are found during the validation process, it demonstrates that the insured has not been truthful and/or upfront in his submissions and prejudices the insurer’s right to validate the claim.
“The policy also contains a forfeiture clause that entitles the insurer to reject the entire claim and cancel the policy retrospectively where there is evidence of dishonesty or that the quantum of the claim has been inflated.”
The findings herein pointed out material discrepancies on this claim