Photo: 123rf
A couple who tried to get two different instances of car damage fixed in one insurance claim have had their claim declined and their insurance cancelled.
It's prompted a reminder that being dishonest with insurers can have wider repercussions.
The case was dealt with by the Insurance and Financial Services Ombudsman (IFSO) scheme.
The couple made an insurance claim saying their car had been damaged when the man drove it into a fence at a friend's house.
They said the front driver's side and left passenger door were damaged.
But the repairer told the insurer the damage seemed to be three separate incidents, the right front corner, the left sill and the tailgate.
The insurer asked the man to provide a signed statement and diagram of how the damage happened.
He said he hit bricks on the left-hand side of the driveway, then the front right side and then the letterbox, which dented the back of the car.
The woman sent photos of the damage.
The insurer investigated and said there was no sign of a letterbox in a position the car could have hit.
The couple admitted the damage to the back of the car happened at a supermarket a few days later.
Their claim was declined and the insurer also cancelled their insurance.
They complained to IFSO. The woman said she thought the damage happened at the same time and apologised when she found out otherwise.
But IFSO backed the insurer.
Ombudsman Karen Stevens said insurers were entitled to decline a claim and cancel a policy if a false statement was made.
"The test for a false statement is whether the statement was wrong, whether the person knew it was wrong when they made it, and whether it was relevant to the claim," she said.
"Even if [the woman] had not known how the damage to the back of the vehicle occurred, as the driver of the vehicle, [the man] knew when and how the damage occurred. He knowingly gave a false statement when he claimed he 'dented the back when he hit their letterbox'.
"The false statement was relevant to the claim, because it indicated [he] had attempted to include damage from another event in the claim, to avoid paying a separate policy excess.
"This was enough for the insurer to decline the claim and cancel the policies."
She said the case was a reminder that these sorts of "little white lies" could have serious long-term consequences.
"Last year we had a case where a man was flagged on the Insurance Claims Register (ICR) after he lied to his insurer about his car being damaged in a flood. This left him not only uninsured but also facing the imminent risk of losing his house because his mortgage was dependent on having insurance," she said.
Glen McLeod, head of Link Advisory, said people who could not get insurance would not be able to buy a property, either. But he said there were often ways to get insurance via an insurance adviser, if it was proving difficult through other channels.
The Insurance Council of New Zealand runs a claims register designed to detect and prevent fraud, including non-disclosure and "double dipping". It gives insurers information about people's claims history. Claims that have been flagged as a concern by an insurer stay on the register indefinitely.
"Trust is a basic foundation of insurance for both the insurer and the customer. While the decision not to offer cover is never taken lightly, a history of fraudulent behaviour can seriously undermine that trust and present a risk to the insurer, potentially making it difficult for someone to obtain insurance in the future. It's important to be upfront and honest with your insurer," a spokesperson said.
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