Insurance fraud is a significant issue that impacts everyone, from policyholders to insurance companies and the broader economy. In New Zealand, insurance fraud costs millions of dollars each year, leading to higher premiums for honest customers. Knowing how to identify and report fraud can help protect yourself and others from the negative effects of these dishonest activities. This guide will provide practical tips on spotting potential insurance fraud and outline the steps you can take to report suspicious behaviour.
Understanding Insurance Fraud
Insurance fraud occurs when someone deliberately deceives an insurance company to receive money or benefits they are not entitled to. It can take many forms, including:
- False Claims: Submitting a claim for damages or losses that never happened.
- Exaggerated Claims: Inflating the value of a legitimate claim.
- Identity Theft: Using someone else’s identity to obtain insurance or file a claim.
Tips for Spotting Insurance Fraud
Recognising the signs of potential insurance fraud is the first step in preventing it. Here are some red flags that we at the Insurance Fraud Bureau watch out for:
- Inconsistent Information: If someone’s account of an incident changes frequently or contains conflicting details, this could be a sign of fraud.
- Unusual Damage: Be wary of claims that involve damage that seem excessive or inconsistent with the reported incident. For example, minor vehicle damage with claims of severe injuries may be suspicious.
- Pressure to Settle Quickly: Fraudsters often want to settle claims fast to avoid detection. If someone is pushing for a quick payout, take extra caution.
- Lack of Documentation: Legitimate claims usually come with supporting documentation. If someone cannot provide the necessary paperwork or receipts, it might be fraudulent.
- Multiple Claims: Individuals who file multiple claims over a short period or have a history of frequent claims may be engaging in fraudulent activity.
Reporting Insurance Fraud
If you think you’ve witnessed fraudulent activity, the first step is to gather any information that might be helpful, such as names, dates, and a description of what happened. You don’t need to go overboard, just jot down anything that seems off or unusual. Then, get in touch with your insurance company. Many insurers have teams specifically for investigating fraud, and they’ll want to hear what you have to say. You can simply call them up and share what you’ve noticed. If you’re not comfortable talking directly to your insurer or you prefer to stay anonymous, consider reaching out to the Insurance Fraud Bureau. We have a hotline and an online form where you can report fraud without giving your name. In cases where the fraud seems more like a crime—like a staged accident or identity theft—it’s also a good idea to report it to the New Zealand Police.
Why Reporting Fraud Matters
Reporting insurance fraud is not just about protecting your interests; it’s about safeguarding the community. Fraud leads to increased premiums, making insurance more expensive for everyone. By reporting suspicious activity, you help insurance companies keep costs down and maintain fair premiums for honest customers.
Insurance fraud is a serious problem that affects all New Zealanders. By staying vigilant and knowing the signs of fraud, you can play a crucial role in preventing it. If you suspect fraud, don’t hesitate to report it to your insurance company or the Insurance Fraud Bureau. Together, we can ensure that the insurance system remains fair and effective for everyone.