Insurance fraud

One of the most common forms of insurance fraud is non-disclosure at the time a policy is taken out.

This causes the insurer to accept business which would otherwise be rejected, or to underrate the risk.

Examples include:

• A policyholder may say he/she has security installed but has none
• A policyholder fails to reveal his/her full claims history
• A policyholder fails to disclose past convictions

Non-disclosure may either be innocent (an oversight) or fraudulent. It is usually detected at the time of a claim and may lead to the claim being rejected.

The Insurance Council of Australia estimates that non-disclosure is represented in 20% of policies underwritten. This figure is probably indicative of the New Zealand level.

Facts on insurance fraud

More than 15 percent of all claims probably have an element of fraud associated with them
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The Insurance Claims Register (ICR) was established in February 1999

How insurers check the accuracy of the policy applications and claims
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