House fire insurance fraud on the rise in NZ
There are signs insurance fraud is increasing as the financial crisis hits home, according to the Insurance Council of New Zealand (ICNZ).
CEO Chris Ryan told insuranceNEWS.com.au while there is no data to back up the claim, insurers are noticing a rise in fraud, typically in the inflation of travel and motor vehicle claims.
“But one of the more disturbing areas that we’re seeing it in is an increase in fires,” he said. “A significant number of those are perfectly legitimate claims, but for some time we’ve been noticing quite an increase in fire claims.”
He says the issue of fraud is at the top of the industry’s mind at the moment and is more than likely related to the recession.
“As times get a little harder, people get laid off or the value of their property isn’t as high as it was a year ago, so they make these attempts to get some easy money.”
Mr Ryan says people may see insurance fraud as a victimless crime but there is a flow-on effect to premiums, and consequences include having future insurance applications declined, being placed on ICNZ’s insurance register as a high moral hazard, and criminal charges.
He says insurers tend to be wary about publicising cases of fraud because they don’t want to encourage copycats but also because they don’t want to be seen to be accusing all their customers of fraud.
“It’s a small minority of people,” he said. “You’ve got to accept that the vast majority of people who are insured are honest people who make legitimate claims.”
CEO Chris Ryan told insuranceNEWS.com.au while there is no data to back up the claim, insurers are noticing a rise in fraud, typically in the inflation of travel and motor vehicle claims.
“But one of the more disturbing areas that we’re seeing it in is an increase in fires,” he said. “A significant number of those are perfectly legitimate claims, but for some time we’ve been noticing quite an increase in fire claims.”
He says the issue of fraud is at the top of the industry’s mind at the moment and is more than likely related to the recession.
“As times get a little harder, people get laid off or the value of their property isn’t as high as it was a year ago, so they make these attempts to get some easy money.”
Mr Ryan says people may see insurance fraud as a victimless crime but there is a flow-on effect to premiums, and consequences include having future insurance applications declined, being placed on ICNZ’s insurance register as a high moral hazard, and criminal charges.
He says insurers tend to be wary about publicising cases of fraud because they don’t want to encourage copycats but also because they don’t want to be seen to be accusing all their customers of fraud.
“It’s a small minority of people,” he said. “You’ve got to accept that the vast majority of people who are insured are honest people who make legitimate claims.”