Insurance fraud has been making headlines in the media recently. Whether you’ve heard outrageous stories of false insurance claims or are worried about what you need to submit to prove your claim, you’ve probably got a few questions.We thought it would be helpful to share some insight we’ve gained over the past 30 years to help you understand this hot topic.
Travel insurance fraud isn’t limited to a specific demographic, it’s a universal problem. It is committed by old, young, male, female, all races and all incomes. It also costs more than a ‘harmless’ extra few dollars here and there; fraud is a crime that affects us all.
Southern Cross Travel Insurance (SCTI) CEO, Craig Morrison, was recently interviewed about insurance fraud and how it affects us. Click on the button below to listen to the clip.
What is fraud?
Fraud can be anything from:
- Inflating a claim in value or quantity
- Making the same claim with multiple insurance companies
- Claiming for something that didn’t happen
- Misrepresenting the reason for the claim (for example, claiming cosmetic surgery as emergency treatment for an accident)
Fraud can also happen when a person isn’t aware of the correct process for making a claim. For example, some of your personal belongings may be covered by your contents and travel insurance policy, but its total value can only be claimed through one provider. In this case, being honest and asking your insurance provider for advice on claiming is the best way to go.
Some people may think it's okay to add a few extra items to a claim to cover the excess, but in reality this is classed as fraud and could affect their ability to get insurance in the future. It seems trivial; an iPhone4 becomes an iPhone 6s Plus, or a cheap watch becomes a Rolex. But it has big implications across the board.
People who are caught making fraudulent claims could find themselves on the insurance blacklist. It’s worth noting that this may encompass other types of insurance as well, including your home, contents and health insurance.
If you do not have sufficient insurance, it could prevent you from getting a mortgage to buy a home. Home insurance is usually a requirement of providers giving you a mortgage.
Worse yet, offenders can even be taken to court and get a criminal record if they’re found to have made a fake claim.
What does this mean for you?
It is estimated that fake claims are raising the cost of SCTI premiums by around 5-10%.
The most recent study by the Insurance Fraud Bureau of Australia estimated that insurance fraud in Australia costs more than $2 billion annually.
SCTI specialist fraud investigators alone investigate up to 1,500 people each year who are suspected of making a false insurance claim. All this extra cost means your premiums are higher to cover the losses claimed by fraudsters.
It’s easy for us to spot the genuine claims from the fraudulent ones, so don’t worry – you have nothing to fear!
The vast majority of our customers are honest and we deal with fraud quickly and efficiently, so that we can focus on providing great cover at low prices.