How to guard yourself against insurance fraud
Insurance fraud is estimated to cost Australians billions of dollars every year. Figures from the Australian Institute of Criminology estimate the true cost of insurance fraud to the community to be somewhere in the region of $9 billion a year.
But what is insurance fraud? How does it affect you? And what measures can you take to protect yourself from it? We’re going to break down this complex topic.
What is insurance fraud?
Fraud is defined by industry resource Understanding Insurance as a, “Deliberately dishonest act that causes actual or potential financial loss to any person or entity.”
The people committing fraud vary greatly, from someone simply overstating the damage of lost items or not declaring essential information relevant to a claim, to large, highly-organised criminal syndicates conducting complex, false claims.
Insurance fraud is generally considered to be either opportunistic, when it involves exaggeration of otherwise legitimate claims, premediated, when it involves staged incidents and deliberate fabrications or fraudulent non-disclosure, when it involves the misrepresentation of facts or deliberately giving misleading information for a claim.
How does it affect me, and what can I do to protect myself?
Insurance fraud has a huge impact on the industry, and the community at large, and increases the price consumers and businesses can expect to pay for their insurance.
The best way to protect yourself against fraud is through vigilance, and generally if something seems as though it’s wrong, it actually is. If you feel someone is engaging in fraudulent behaviour, it is in your best interest to report this to the correct authorities.
You can contact the Insurance Fraud Bureau of Australia here, or reach it on the following hotline when calling during business hours - 1800 600 444.
Have you been the victim of insurance fraud, or know someone who has? What advice would you give to someone who thinks they are victims of fraud?
Share your thoughts in the comments.
Related links:
8 steps to recover your losses after a disaster
How to minimise your risk of underinsurance
10 ways to prepare your home for a disaster