We have written on this blog about fraud in an attempt to alert vehicle owners to the dangers of car insurance fraud. These posts reflected on topics such as types of car insurance fraud and whether polygraph testing could help to reduce car insurance fraud.
I am a firm believer that the law needs to be hard on fraudsters and that the criminals convicted of these “white collar” crimes need to be punished harshly! Punishment should be a deterrent to others considering a false claim! In the post titled “Would you lie on your car insurance claim?” we made reference to the fact that some people appear to justify fraudulent claims as if there is no significant harm to anyone…Nothing can however be further from the truth!
Insurance fraud is not something to be seen as a matter between a client and his insurance company! Insurance fraud affects us all and fraudulent claims are not only costing the economy – it is costing you and me in more expensive insurance premiums and having to endure more suspicion from insurance investigators when submitting our legitimate claims! It is believed that the most under reported fraud is to be found in the insurance industry.
What is the extent of the problem of insurance fraud in South Africa?
I have come across interesting revelations on insurance fraud in South Africa in an article by Paddy Hartdegen. [This appeared on Property24.com]
I would like to quote some important facts on insurance fraud in South Africa:
- Adam Samie, chairman of the South African Insurance Association, estimates that insurance fraud is costing insurance companies at least R2bn a year – equivalent to about 10% of the claims submitted.
- Vivienne Pearson, stakeholder relations manager for the Association, says that these statistics are way too conservative and she estimates that local insurance fraud is in line with international trends and that fraudulent claims amount to about 30% of the claims submitted annually.
- The attitude of 30% of insured South Africans is that, in the event of a claim for losses or damage, they have a right to get back more than they’re actually entitled to receive.
- The South African Insurance Association says that in 2008 the short-term insurance industry paid claims worth R22bn. If Pearson’s estimates are correct then that means around R6,6bn of the money paid was fraudulently acquired by the insured people.
The author, Paddy Hartdegen makes a very concerning statement when he says that between 10% and 30% of all well-to-do South Africans – who can afford to be insured – are stealing money from the insurance companies. They are doing so wittingly and without the slightest signs of remorse.
How much less could you and I could have paid for car and other short term insurance if these insurers did not have to make provision for losing R6,6bn in fraudulent claims?
How do we report car insurance fraud in South Africa?
We are well aware of the consequences of insurance fraud. Fraudulent claims can lead to prosecution and jail and can result in an insurance company disallowing the entire claim and refusing to make any payment under the insurance policy.
We, as law abiding citizens should consider reporting instances of insurance fraud. These fraudsters are not only causing damage to the economy but are hurting ourselves, our friends, colleagues and family. They make it difficult to pay the expensive car insurance premiums and their fraudulent claims are benefitting only their own pockets. To put it rather bluntly – “they are giving you and me a big Up Yours!”
Because of the high levels of insurance fraud in South Africa, the South African Insurance Association has on the 30th of October 2008 launched the Insurance Crime Bureau to investigate and prosecute fraudulent insurance claims.
If you are aware of insurance fraud – report this to the Insurance Crime Bureau. The contact details are as follows:
South African Insurance Crime Bureau
PO Box 2522,
Telephone: +27 11 021 1432/3/4/5
Fax: 0866 317796
Insurance Fraudline: 0860 002526
May we be pro-active and alert the authorities of these fraudsters. The next time somebody tells you with a big smile on his face about his undeserved insurance payment – make a note and act on it!
The quicker we stamp out insurance fraud, the quicker our own premiums will fall!