What is insurance fraud?
Most Australian insurance policyholders are honest, and file claims with genuine reason. However, some policyholders lodge dishonest claims. These may include faking an accident, theft or injury (to greater or lesser degrees) in order to deceive an insurance company or agent to collect money to which they aren’t entitled.
Some common methods of fraud include:
- Claiming for loss, damage or injury that never occurred
Exaggerating an otherwise legitimate loss, damage or injury
- Claiming for unrelated, non-existent or pre-existing injuries
- Causing arson or other intentional property damage
- Staging accidents with the intent to submit a fraudulent claim
- Conspiring to support those involved in a fraudulent claim
How fraud affects us all
When you pay your insurance premium, your money is pooled with that of other policyholders to form a fund from which claims are paid. We all share the risk. That means insurance fraudsters are stealing directly from their fellow policyholders. The more fraudulent claims get passed through the system, the higher premiums become because of the larger risk revealed by claims statistics.
It doesn’t matter how big or small the deception is: when an insurance company is forced to pay out more money by way of claims, they have little option but to raise the premiums of their customer base. This issue affects us all because one way or another, honest consumers and businesses pay the price.
People of all incomes, ages and nationalities are both perpetrators and victims of insurance fraud. Estimates show that honest Australian policyholders are contributing about $400 per family to compensate for insurance fraud crime, or about $100 per premium. What is clear is that insurance fraud comes at a huge cost to the community; now empowered by the national Insurance Fraud Hotline to report it.
There are several types of insurance fraud, corresponding with the different types of insurance. Insurance fraud types include Workers Compensation; Motor Vehicle; Property; Arson; Life; Health and Other (such as Public Liability insurance). Please click on the links or see the drop down menu options to read more about each type.
As with all insurance fraud, the pocket it ultimately hits is yours.
If you have information that you believe in good faith is insurance fraud, report it NOW!