Insurers on high alert for fake claims

17:00, Jul 06 2013
Opportunity knocks: Overstating or faking insurance claims can be costly.

Mistakes made in cases of attempted insurance fraud and deception have been revealed in the publication of recent case notes by the insurance and savings ombudsman.

In a recent release of investigation reports, three cases have been revealed showing the lengths to which insurance company investigators go to expose false claims.

When a claim is made, policyholders must understand that any false statements they make, or faked documents presented as evidence, can lead to their whole claim being declined and their policy torn up should they be detected.

Claimants must behave with what is termed "utmost good faith", or face a struggle to get any insurance in the future.

Even unintentional errors, omissions or untruths can result in insurers becoming unwilling to pay claims.

The first of the cases indicates just how thorough insurance investigators can be.


A woman claimed she had been mugged outside her place of work by two men who took her handbag and jewellery. She submitted photos of her wearing certain items as proof of ownership.

Scrutiny of those photos, supposedly taken between two and four years' earlier, raised suspicions with the insurer's investigator, who was called in to probe the authenticity of the claim.

The investigator took his own photos of the areas in the living room and garden where the woman's photos were taken.

The ombudsman reported: "Several items on a side table in the living room had remained exactly the same and the level of liquid in one bottle had remained approximately the same.

" Further, the shrubs and trees in the garden photograph had not appeared to grow at all over the time and one shrub had the same colouring, in the same area, where new growth was taking place."

Faced with this analysis, the woman admitted the photos had been taken more recently.

She said she had felt pressured while being interviewed, and as a result gave incorrect times for when the photographs were taken.

In the second case, following a burglary, a policyholder submitted a collection of receipts to prove she had owned items she claimed were stolen in the break-in, which was not the first she had suffered.

When it checked the claim, her insurer found 10 of the receipts were photocopies of receipts she had submitted in a burglary claim nearly two years before. The insurer concluded the woman was trying to defraud the company, despite her claims that she had sent the receipts by mistake due to medication she was taking that caused a loss of memory and concentration.

The woman's neuropsychologist told the ombudsman he would be surprised if the medication could have caused such an error.

The ombudsman decided, on the balance of probabilities, the woman had failed to live up to the requirement to deal in the "utmost good faith" with her insurer.

The third case involved a man creating a misleading document to give his insurer as a proof of purchase for items lost while travelling. This resulted in a man's entire claim being declined by an insurer.

The man made a claim under his credit card travel insurance policy when his suitcase disappeared after he checked it in before flying to India.

When he made his claim, he handed in a document from an electronic goods store as proof of purchase for two items.

But when the insurer investigated, it discovered the document was an altered version of the store's standard quote form.

The man claimed he had not intended to defraud the insurer, and had provided the document merely to give an indication of the purchase price, date and place of purchase.

The ombudsman did not buy that.

Indeed, the claimant had claimed for an item the store never stocked.

Sunday Star Times