Impact of fraud

Find out how much insurance fraud costs insurers every year and who ends up paying that cost.


Insurance is about collecting a pool of money from the many to pay out for the losses of a few. The cost of those claims is a key factor in determining how much everyone pays in premiums.

When you take out insurance, you agree to do your best to reduce the costs of the claims you make by doing things like keeping your property in good condition and not doing things you know will probably cause damage. You also agree to be honest about what you’ve lost when you make a claim.

If you don’t do these things, you and every other person who has insurance with the same insurer ends up paying to cover your claims.

Insurance fraud costs every policyholder.

According to current estimates, general insurance fraud in New Zealand costs up to $614 million in claims every year. That means that every year, honest New Zealanders are paying to cover other people’s fraudulent claims.

The cost of insurance fraud isn’t limited to claim values. Insurance fraud increases insurers’ operating costs through additional time, staff and investigation. These costs also need to be passed on to consumers.

The larger the size of the dishonest claim, the more everyone ends up paying.

Keep reading: Types of fraud