Insurance fraud is one of the reasons why we complain about expensive car insurance premiums. Too many claims include some element of fraud, varying from exaggeration of the amount claimable to outright falsity of the alleged facts relied on.
When submitting an insurance claim the insured client makes specific statements and disclosures – and the onus rests on the insurer to investigate whether this claim does have merits and to consider whether payment should be made.
If it is found that the insured client has engaged in fraudulent conduct or used fraudulent means or devices to obtain any benefit not due to him, not only would the claim be rejected but the policy is likely to be cancelled and the client might struggle to obtain insurance cover in the future.
Unfortunately the fraudulent claims cause the innocent to suffer with the guilty. Claims are ever more minutely scrutinised, ever more closely examined, ever more treated with suspicion, and the genuine claimant is experiencing this negativity!
But can we not use the lie-detector or polygraph test to establish whether the claimant is submitting a fraudulent and untruthful claim?
Recently, one of the ways in which some Insurers are trying to solve the problem is by making use of the polygraph or “lie detector” and asking or compelling the Insured to submit to such a test. The Policy Protection Rules provide that no Insurer can compel an Insured to undergo a Polygraph or Lie Detector test.
But what if I am so convinced that I do have a claim and my version is the truth – and I want the insurer to know this and favourably consider my claim? The Insured client may decide to willingly undergo a Polygraph/ Lie Detector test. If he does agree to undergo the test then he/she has the right to have a legal representative or any other person present. The Insured is also entitled to a recording of the questions put and the answers given.
If you voluntarily undergo the Polygraph or Lie Detector test and fail it, the Insurer is still not entitled to repudiate the Policy based on such failure.
The Short Term Insurance Ombudsman has provided a few suggestions to the insured client who considers undergoing a polygraph test:
(a) Take legal advice before making a decision, especially if the claim is substantial and you have reason to believe that the Insurers suspect misrepresentation or fraud.
(b) Do not go to the test alone. Obtain a recording as suggested.
(c) If, after you have undergone the test, Insurers repudiate the claim, you are entitled to consult a lawyer, or make a formal application to the Ombudsman to investigate the matter if you maintain that the repudiation was not justified.