Insurance Fraud – tempted?
Insurance fraud has been with the insurance industry since it began. There is a misconception that insurance fraud is a “victimless” crime where nobody personally suffers a loss, but huge wealthy insurance companies make extra playouts from their wealth funds.
The reality is that insurance fraud has to be paid for by honest policy holders. This is done by increasing your premiums to account for those less scrupulous policy holders who are committing fraud.
Common insurance fraudulent doings:
- Losses that didn’t happen
- Staged losses – arson, car theft etc
- Exaggerated claims
- Non-disclosure of information that insurers require in order to match the correct premium to the risk
The extent of Insurance Fraud
The most recent The Insurance Council of NZ (ICNZ) survey in 2007 found that the cost of fraud was estimated at NZD $450 million per year and that Insurance premiums are inflated by average 10% to make up the difference.
Of this, the lowest levels of fraud are House insurance (6.1%) and the highest is Travel insurance (20%).
What’s the Industry doing about fraud?
- Specialist claims training – all insurance claims personal have fraud detection training and each new claim goes through a series of fraud indicators. If the claim seems too good to be true it normally is. If fraud is suspected an investigator is appointed. (Note: sometimes investigators are appointed because further information is needed; not all investigations involve fraud).
- Insurance Claims Register – the industry has a register of claims that has been operating for 12 years and has over 8 million claims in the database. This database is used to check whether full disclosure of claims history has been made and if the claim is being claimed by more than one insurer. Sometimes this database is checked when policies are taken out to ensure they have been given the correct information.
- Zero tolerance of insurance fraud – Insurance companies will prosecute fraudsters through the court and they have a Memorandum of Understanding with the Police. If you are found guilty, your chances of obtaining insurance in the medium future is severely restricted if not impossible. With no insurance, you won’t be able to obtain a loan for business, motor vehicle or potentially a house.
- Specialist Fire Investigators – These are appointed if arson is suspected.
- Fraud Hotline – The Insurance Council of NZ has a toll free number 0508 FRAUDLINE (0508 372 835) where the public are encouraged to call and report information about potential insurance fraud cases. Calls can be made anonymously and no details are passed on to the alleged fraudster.
(Excerpts @ ICNZ)
Non-disclosure of dodgy driving history stops claim pay-out
Mikayla accidently hit a median barrier while driving home in the middle of torrential rain. Her VW Golf was written off in the accident, but her insurance Company declined the claim. Her Insurer argued that Mikayla had not disclosed previous traffic infringements when she first applied for car insurance.
When Mikayla first applied for cover she wrote on the proposal she (just) had a prior DIC conviction thinking this carried the most weight. On her claim form, Mikayla then wrote she’d had 4 x speeding tickets, which was also true.
The Insurance Company revoked Mikayla’s policy and refunded her the premium. The reason for this is that if they had known of all of Mikayla’s speeding tickets, they would not have offered her cover in the first place.
Mikayla explained that her Mum had completed the insurance policy proposal and that failing to disclose her speeding tickets was simply an oversight. Unfortunately although Mikayla acted innocently and in good faith, she had an overriding duty at law to disclose all traffic infringements. Also, Mikayla’s history of speeding was material in that they would have influenced the judgment of a prudent insurance company whether or not to accept the risk. The Insurance Company was acting within its legal rights to decline Mikayla’s claim.
World disasters on the decrease?
Worldwide insurance losses from natural and man-made disasters continue to trend downward. A report, released by large reinsurer Swiss Re, found that losses from disasters had dipped considerably over the first half of the 2015.
Total economic losses from disasters in the period January to the end of June 2015 reached US$33 billion, of which half were covered by insurance.
By comparison at the same stage in 2014 the total economic losses totalled $54 billion. The 10 year average is actually US$99 billion.
With economic trends pointing down, deaths related to disasters sky-rocketed when compared with last year as approximately 18,000 people lost their lives in disaster events in the first half of this year compared with 4,800 last term. The worst disasters of the first half of the year were the Nepal earthquakes and heat waves in India and Pakistan a devastating combination.
Despite having 15 luxury cars already in his possession, the son of a Swiss multi-millionaire was so intent on upgrading his collection he devised a scam to claim another model on his insurance. The unnamed 20-year-old, who was said to have become bored with his Ferrari 458 Italia has been convicted of deliberately setting fire to the $350,000 car, along with three other accomplices.
The idea came about when the young man realised he would get a lot less for the car than he had hoped, after a valuation put it at just $292,500. He was then advised by a local car dealer to commit insurance fraud which prompted the pair to plot together, with the dealer recruiting an accomplice from his garage to help. In order to create an alibi, the car’s owner went with a friend to a massage parlour in Augsburg, Germany, where he lives part time, leaving his accomplices to set fire to the car for a payment of $23,000 each.
But unbeknownst to them, security cameras recorded the crime and the plotters were arrested when they returned to Switzerland.
The wealthy businessman father of the Ferrari owner paid his son’s bail, which was set at $331,000. During the trial, the young driver also revealed he still received an allowance of between $10,000 and $15,000 per month from his father. He also owned several properties totalling more than $40 million and 15 cars including a Lamborghini. All the vehicles were paid for by his father.
We are marathon men!
We talked the talk, and now we have walked the walk. Well, ran to be correct and for all 42.2 km of the inaugural Taupo marathon! Richard, Matt and Andy pictured above at dawn on the day of the race, where we all look far more energetic, with more smiles and much less chaffing than at the finish line.
1. In which town do the Simpsons reside?
2. What is the name of the Simpsons’ next door neighbor?
- Barney Gumble
- Ned Flanders
- Principal Skinner
3. Who founded the Simpsons’ town?
- Jebadiah Springfield
- Zachariah Springfield
- Springfield Manhattan
4. How old is Bart?
5. What is the name of Lisa’s jazz mentor?
- Billy Jazzman
- Blind Willy Witherspoon
- Bleeding Gums Murphy
6. Who is Mr Burns’ assistant?
- Seymour Skinner
- Barnard Gumble
- Waylon Smithers
7. What is the name of the bar where Homer drinks?
- Moe’s Tavern
- Joe’s Cavern
- The Drink Hole
8. Which one of these is not a catchphrase Bart uses?
- Aye Carumba!
- Don’t have a cow, man!
9. What does Bart do in the opening credits?
- Write on the blackboard
- Play a practical joke on Homer
- Drive Marge’s car
10. What is the name of the minister at the First Church of Springfield?
- Ned Flanders
- Timothy Lovejoy
- Carl Carlson
11. Who runs the Kwik-E-Mart?
- Mr. Burns
12. What nationality were the people who bought the power plant from Mr. Burns?
13. What does Smithers collect?
- Star Wars memorabilia
- Malibu Stacey Dolls
- Romance comics
14. Who is Springfield’s underperforming and over promising attorney at law?
- Lyle Lanley
- Lionel Hutz
- Jimmy the Scumbag
15. Who practices medicine without a license?
- Dr. Hibbert
- Dr. Nick
- Bart Simpson
Answers 1-Shelbyville, 2-Ned Flanders, 3-Jebadiah Springfield,4-10,5-Bleeding Gums Murphy,6-Waylon Smithers,7-Moe’s Tavern,8-Woohoo! 9-Write on the blackboard, 10-Timothy Lovejoy, 11-Apu, 12-German, 13-Malibu Stacey Dolls, 14-Lionel Hutz, 15-Dr. Nick