How criminal convictions impact your insurance

April 26th, 2023

Keeping or getting insurance might be the last thing on a potential criminal’s mind, but it is important to understand that having a criminal conviction in Aotearoa makes many situations more difficult. A recent article by the Otago Daily Times details the many obstacles that a criminal conviction will bring with it. With more than 60,000 criminal convictions each year in New Zealand, many people don’t consider that their decisions can be life changing.

Consequences of convictions

Employment, housing and leisure activities are all at risk if you have a criminal conviction. Imagine not being able to provide for your family – financially, or without the security of a home to live in?

  1. Looking for work

Having a criminal conviction can make it harder for you to find employment. Consider the employer – they’ll need a simple way to screen the many applicants they get for a job. A simple screening measure would be to remove any people with convictions from the short list.

Many employment processes will ask you to declare any convictions as part of their standard paperwork, and you will need to adhere to this. Employers have many ways to fact check applications, including checking with the Ministry of Justice or requesting a police check. A simple Google search may be enough to uncover a criminal conviction too.

  1. Losing your current job

Although some convictions don’t incur jail time, you may still be bound by your employment agreement to disclose a conviction to your employer. Your employer will need to know about driving convictions if you drive work vehicles (their insurance won’t cover you if you’re not legally able to drive), and you may be required to follow a business’ code of conduct which will outline what behaviours are acceptable and not acceptable for all employees of the business.

  1. Buying a house

If you need a mortgage, you’ll need to have house insurance in place. This can be difficult to apply for if you have a conviction. Although disclosure of convictions may not be needed to apply for a home loan, you will need to disclose it to any insurer.

  1. Renting a house

Much like a prospective employer, if you’re a property manager or landlord with lots of interest in your property, a simple way to screen applicants may be to remove those with a criminal conviction. You’re likely to be asked to disclose this, and a quality vetting process is likely to pick this up, whether or not you decide to detail this on your application form.

  1. International travel

Travelling outside of New Zealand can be difficult with a criminal conviction. Customs forms will usually ask you to disclose this information, and you’ll need to advise this as part of any visa application process too. If you need to travel overseas with a criminal conviction  you should check with the country’s embassy or immigration department before making any bookings.

  1. Risk of deportation

If you’re not a NZ citizen, you may run the risk of deportation as a consequence of your criminal actions. A conviction can also jeopardise an active residency or citizenship application.

The impact of criminal convictions on insurance 

Regardless of whether your crime relates to fraud, your insurer may not look favourably on any conviction. A conviction is a signal to an insurer that you’re a risk taker, and your integrity, ethics and honesty will be questioned.

All insurers will ask new applicants if they, or anyone they want to insure has any criminal convictions. This can mean that you may not be able to cover a convicted family member on your vehicle insurance or contents insurance policy.

If you have existing insurance policies and are convicted of a crime, you are obliged to immediately tell your insurer. If you don’t, an insurer can refuse to pay part or all of a claim. Honesty really is the best policy here.

Your insurer is also able to refuse to continue your insurance. You may find it difficult to get insurance with another provider as insurers can flag you on the Insurance Claims Register, which is accessed for application processing by participating insurance providers.

“If you do find an insurer, you’ve got to be prepared to pay a higher premium.”

Insurance Fraud Bureau Manager, Yvonne Wynyard.

Insurance fraud is a criminal offence

If you’re thinking of exaggerating or not disclosing required details on your next insurance claim, think again. Committing insurance fraud is a crime and you can be convicted. Is adding an extra item to your claim or leaving out key details really worth the consequences?

Concerned about insurance fraud?

Insurance fraud is not a victimless crime; it’s a crime that all policyholders pay for.

It’s critical to tell the truth about what’s happened when making a claim. You can report insurance fraud anonymously on our website.