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

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.