Connect with us

Finance

Understanding Insurance Fraud in New Zealand

Published

on

Insurance Fraud

Insurance fraud or scam is becoming more rampant globally today. A lot of people present themselves as insurance agents to market cheap, fraudulent policies to consumers who think they’re acquiring legitimate coverage from a licensed insurer. In New Zealand, insurance fraud costs New Zealanders around $62 million per year. Do you know how much that equates? It amounts to approximately $62 per household. 

Insurance fraud is not new anymore, but it’s a serious issue. Either insurers and policyholders can commit fraud and when found out, they’ll be fined heavily and even imprisoned. If you are thinking of taking out an insurance policy, you might want to be aware of the traps that might catch you and have you running for the assistance of an insurance fraud lawyer.   

 

Insurance Fraud Defined

Insurance fraud is done when an insurance company or insurance broker purposely refuses payment to a policyholder who is entitled to the compensation as specified in the insurance policy. A policyholder performs insurance fraud when incorrect or confusing information is handed over an insurance claim. Insurance fraud isn’t constricted to a particular type of insurance; people commit car, health, life, and health insurance fraud.  This is the reason why insurance companies hire insurance fraud investigators to help expose situations where fraud has or is currently occurring.

 

The Insurance Council of New Zealand

This council supports a register called the “Insurance Claims Register” (ICR). The ICR permits insurance companies to check the accuracy of the data offered with policy applications and insurance claims. The ICR can be compared to a huge database of all insurance claims logged with participating insurance companies. The Insurance Council of New Zealand is composed of 20 member companies, which reports for 95% of New Zealand’s general insurance business. The member companies secure around half a trillion dollars in assets. 

These sharing insurance companies have access to the claims history of a client. This helps them when funding a new business (assessing the risk and price for the policy) and processing claims —for the particular objective of checking for insurance fraud. 

This type of swindling can also be committed when an individual applying for insurance relies upon or withholds the required information. Here some basic examples of insurance fraud: 

  1. Giving false facts, occurrences that never happened or reporting incidents that were purposely arranged. 
  2. Overemphasized claims or escalated values for lost or stolen articles. 
  3. The policyholder neglects to disclose his complete medical history when buying a health insurance policy. 
  4. The policyholder doesn’t want to disclose previous rejections from other insurance companies. 
  5. The policyholder excludes information on previous criminal convictions. 
  6. It can also be considered insurance fraud if the non-disclosure of facts leads the insurance company to assent an application when it would otherwise have been rejected. 

 

Outcome of Insurance Fraud

Of course, people who commit fraud will always have consequences. They will have their claims turned down and policies cancelled– they can even get a criminal conviction. For instance, if you have had a claim rejected due to fraud, it may get hard to obtain insurance cover in the future. Most insurance keeps data of claims in the Insurance Claims Register, so most New Zealand insurers can determine people with declined claims when they’re approached for cover. 

Since people who have done fraud can find it really hard to obtain insurance, they may also struggle taking out a mortgage or acquiring finance for a vehicle. 

To prevent insurance fraud, make sure to read your policy terms and conditions carefully so that you can be sure that you’ve met all your responsibilities before you’re in a situation where you need to claim. Another, be honest when you’re making a claim or taking out a policy with your insurer. And if you are aware of someone who’s been planning of committing insurance fraud, try to remind them that it could have serious consequences. 

Author Bio:

Ivandrea Ollero is a daytime writer for Insurance Advisernet NZ, one of the largest and most trusted General Insurance businesses in New Zealand, providing leading insurance products, technology, and policy wordings. She is also a content crafter who researches and writes custom content about travel, fashion, finance, business, home improvements, health, and beauty, in order to provide helpful information and tips for her readers. Ivandrea graduated from St. Scholastica’s College, Manila, with a Bachelor’s Degree in Broadcast Journalism in 2016.

 

 

Read more Finance related stories in The Weekly Trends magazine.

Ivandrea Ollero is a writer for Kims Romantic Getaways Sydney, one of Australia’s beach retreat places immersed in subtropical rainforest, offering a cluster of lavish individual timber bungalows and spa villas on the beach. She is also a content crafter who researches and writes custom content about travel, fashion, finance, business, home improvements, health, and beauty in order to provide helpful information and tips for her readers. Ivandrea graduated from St. Scholastica's College, Manila, with a Bachelor's Degree in Broadcast Journalism in 2016. 

Continue Reading
2 Comments

2 Comments

  1. Pingback: How Animated Video Create Healthcare Awareness - The Weekly Trends

  2. Pingback: 3 Best Tips to Remember about Insurance Policy - The Weekly Trends

Leave a Reply

Your email address will not be published.

Support Us!

Write for Us

The Weekly Trends

The Weekly Trends

Facebook

Trending